Why People File Bankruptcy

Written by jessica Alba

Are you like millions of other people who are having a very difficult time financially? Is your life consumed by the worries about how you are going to pay the bills? Is your family relationship suffering, because you are always fighting about money? Are feeling boxed in with no way out? Have you been contemplating why people file for bankruptcy and if you need to do the same?

If so, know you are not alone. You may need that fresh start, to get your financial life in order. You may have exhausted all other options, and now it seems like the only way out of a financial mess. So, you need to find out why people file for bankruptcy and if you will qualify.

The Plastic Plague

Credit card debt is probably the major reason most people end up filing for bankruptcy. In an instant gratification society, it is too easy to make purchases with that little piece of plastic. Unfortunately, by the time the bill comes in the mail, many folks are surprised how many times they have bought something on credit in the last month. Add a handful of other cards, and it does not take long to have more bills than you have money.

Unfortunately, with rising unemployment, coupled with the higher cost of the basic necessities, many families are just trying to get by, until the economy improves. But, a few trips to the grocery store and the cards are quickly maxed out.

Mortgages

The great American dream is to have a good job and a home. However, if the boss even cuts your hours back, the mortgage becomes beyond financial reach. Even people who have managed to keep their jobs are on the brink of foreclosure because of adjustable-rate mortgages that have skyrocketed their payments. What seemed like a good deal when the papers were signed has now become a financial nightmare.

Then, something has to be done quickly. If the homeowner waits until foreclosure proceedings are in place, it could mean not having a roof overhead. So, it is important to contact a bankruptcy lawyer before things get worse, because there might be a way to keep the assets necessary for the basic necessities of life and earning a living.

Job Loss

Thanks to a troubled economy, millions of people are now out of work. Even if it is possible to file for unemployment, the payments are only a fraction of what a former job paid. It is meant to get you by, until another income opportunity become available, but it is not enough to meet all of the monthly bills.

In truth, most people are only a paycheck away from financial troubles. When times are good, it is easy to stretch the finances to support the bills. But, it only takes one missed paycheck and you get behind. Then, catching up is virtually impossible.

Illness or Injury

Even with insurance, illness and injury can destitute a family in no time at all. For example, the costs for cancer treatment can quickly become astronomical. Communities and friends have fundraisers to help offset the costs. Families sell off everything in the house that has any value and is not vital to survival. But, it usually is still only a drop in the bottomless bucket of medical expenses.

The problem is only compounded, if an income earner is the one who has been sick or injured. He/she may not get any sort of paycheck. Even if there is some sort of disability plan, the checks are only a portion of the salary, and they will not last forever. Oftentimes, the illness or injury has made it impossible for the person to return to work, at least at the full time level. So, the ability to pay the bills will never be the same.

What about You

So, have you been through one of these circumstances, or are you experiencing some other life changing financial trial. When it comes to filing bankruptcy, it legally really does not matter why you cannot meet your financial obligations.

If you are on the verge of being served with a foreclosure notice, or you are fearful that you are going to wake up one morning and find your car missing from the driveway, or you cannot meet your monthly minimum payments, it is time to contact a bankruptcy lawyer and discuss your financial options.

In some cases, even if you could figure out how to pay the bills on some kind of plan, you would be 800 years old before you would be debt free. Then, it is time to give yourself a break and give yourself and your family a future. Bankruptcy is not an easy way out of your financial responsibilities. But, it is a second chance.