Top Reasons People File Bankruptcy

June 11th, 2009 admin

People file bankruptcy for many different reasons. Very few people file bankruptcy when they can pay their bills. The bankruptcy changes made in 2005 prevent this from taking place. Here are the top 5 reasons people actually file bankruptcy:

Medical Bills
Recent illness or an unfortunate accident can ruin a family’s finances in short order. Lack of insurance increases this risk. Add in the fact that an illness means one earning family member or more can miss work, and income is drastically reduced. Which leads us to the next popular reason people file bankruptcy.

Job Loss
Losing a weekly paycheck can affect the family budget quickly. Unemployment benefits only last so long, and are typically a fraction of previous earnings.

Stop Foreclosure
Stopping a foreclosure can often only be done by filing a chapter 13 bankruptcy. Past mortgage payments and legal fees can be included, permitting filers to keep their home and create a feasible payment plan.

Stop Wage Garnishments and Repossessions
Filing a chapter 7 bankruptcy can stop wage garnishments immediately. If your car or other property is at risk of being repossessed, you can file a chapter 13 and stop the repossession by including the missed payments in the payment plan.

Stop Creditor Harassment
Creditors can no longer contact you once you have file bankruptcy papers. Creditor calls and mail will stop once you file, allowing you to relax and get back on your feet.

Filing bankruptcy no longer has the stigma typically associated with it in the past. Unfortunately with todays rising unemployment rates, even more Americans will be filing bankruptcy for financial relief.

Guest Article Provided By: BankruptcyFormProcessing.com where you can find more information on filing bankruptcy and DoItYourSelfBankruptcyForms.com where you can find free bankruptcy forms.

Entry Filed under: Credit + Ratings, Your Finance Resources