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 destituteā€”just the opposite. To find out more, speak to a bankruptcy lawyer right away. 

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Figuring Out My Finances

For years, I lived on the edge of a paycheck. I was always running out of money, wondering when I would be paid next, and hoping for extra bonuses. Unfortunately, one day my luck ran out, and I found myself without a way to pay my rent. My landlord wasn't patient with me, and I actually got kicked out of my place. It was devastating and embarrassing, but I knew that there had to be a way to repair my finances. I met with a bankruptcy attorney to talk with me about my debts, and she was incredibly helpful. After seven years, I was able to completely correct my credit, and it has changed my life. Check out this blog to learn more about bankruptcy.

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