Once a person is educated on what Bankruptcy is and what it can do, the next thing they must decide is whether they have a valid reason to file for bankruptcy in which it will help them. Although Bankruptcy is a beneficial tool people must remember that it does have some negative repercussions that must be contemplated. Bankruptcy can affect credit, may create issues with keeping bank accounts and credit cards, can cause the loss of valuable possessions, and makes it difficult to get on with necessities of life such as buying or renting a home or car, getting insurance or finding a job. Financial advisors may view bankruptcy as a desperate last resort that should only be carried out with the counsel of an experienced bankruptcy attorney like myself, and only when budgeting, credit counseling or other efforts have failed.
Why do people file for Bankruptcy?
There are many reasons why people may find it beneficial, if not necessary, to file for Bankruptcy. Here is a list of twelve common reasons:
1. Eliminate the Legal Obligation to Pay Most of Your Debts.
As was discussed in a prior blog, the goal of bankruptcy is to discharge debt and give the debtor a fresh start. This can be done through Chapter 7, liquidation, or Chapter 13, reorganization.
2. Stop the Foreclosure on Your House and Allow You to Effectively Make Payments to Catch up on Missed Payments of Your Mortgage.
If your home is in a foreclosure, then a Chapter 13 will stop it if is filed before the sheriff’s sale. However, a bankruptcy does not eliminate your mortgages that are filed on your home. A Bankruptcy will structure a repayment plan to enable you to repay the amount that you are behind on your mortgage over a three to five year period.
3. Prevent Your Car or Other Property From Being Repossessed.
Bankruptcy can save property such as a car from being sold even if it has already been repossessed. However, your bankruptcy must be filed before the car or other property is sold at the auction. Again, money owed will be consolidated into your Chapter 13 plan. After you file, you will no longer pay the bank or the finance company, instead you will make your monthly payments to the bankruptcy trustee who in turn will pay the finance company your missed payments over a three to five year period.
4. Reduce or Even Wipe Out High Medical Bills.
A Chapter 7 Bankruptcy can wipe out your outrageous medical bills that simply won’t go away.
5. Recent Loss of a Job.
Many people fall behind in bills and seek to file bankruptcy due to the loss of a job or some means of income. Many times the loss of a job is combined with the fact the debtor is also incurring high medical bills. The loss of employment is also intertwined with a family also incurring high medical bills.
Many people fall behind in bills and seek to file bankruptcy due to the loss of a job or some means of income. Many times the loss of a job is combined with the fact the debtor is also incurring high medical bills. The loss of employment is also intertwined with a family also incurring high medical bills.
If any of the first five reasons to file Bankruptcy fit your situation please contact Ben W. Koyl at Our Website. Check in to our next blog for seven more common reasons people file for bankruptcy.
The author, Ben W. Koyl, is an attorney located in Chicago, IL. He is the principal of the Law Office of Ben W. Koyl, P.C. with offices located in the Chicago Loop, Beverly Woods / Blue Island, and Joliet, IL. The firm's website is http://www.chicagobklaw.com.
The author, Ben W. Koyl, is an attorney located in Chicago, IL. He is the principal of the Law Office of Ben W. Koyl, P.C. with offices located in the Chicago Loop, Beverly Woods / Blue Island, and Joliet, IL. The firm's website is http://www.chicagobklaw.com.
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