Why Bankruptcy? Understanding Bankruptcy Motivations
Posted on: 9 August 2022
The way you think about bankruptcy depends on your experiences with it. You might never have met anyone who has declared bankruptcy, or so you think. Declaring chapter 7 is a personal, legal, and financial move that can create a positive change for those who have few other choices. Read on and learn why bankruptcy can help many and what it can mean for those who go through it.
Debt Discharges
When you hear the term discharge, it means the debt has disappeared forever. Not all debt can be discharged, however. In many cases, filing for chapter 7 bankruptcy allows the filer to gain enough financial power to build back their life, however. Problematic debt like credit card debt, medical bills, personal loans, and payday loans usually simply disappear with a chapter 7 filing.
Ask your bankruptcy lawyer about debts owed to the IRS, student loan debt, spousal support and child support, and non-financial lawsuits and legal fees. Some of these can be discharged and some cannot.
Reasons to Declare
There are as many reasons for seeking bankruptcy relief as there are filers. Many, however, can cite the major thing that pushed them to speak to a bankruptcy lawyer. Some of those are:
- A severe illness and the accumulation of high medical debt.
- A divorce or death in the family.
- Losing a job through getting laid off, being fired, or being too ill to work.
- Having too much debt in relation to income.
- Natural disasters and lack of adequate insurance.
It's Not About Failure
Even if you let yourself get behind on your bills because of what you assume to be bad money management skills, you must realize that you are not alone. Even if you don't know other filers, they are everywhere. Almost no one admits willingly to declaring bankruptcy, but you are one of many who had to file for one reason or another.
Regardless of the reason for filing chapter 7 bankruptcy, the financial fresh start offered by filing chapter 7 can be an opportunity to do things right the second time. Your monthly budget will probably look a lot different and that is a good thing. You no longer need to worry about your credit card payments and other bills that are included in the filing. You now have money for housing, food, fuel to get to work, and for your family needs. Bankruptcy won't leave you destitute—just the opposite. To find out more, speak to a bankruptcy lawyer right away.
Share