What Are Some Common Reasons That People File for Bankruptcy?

Millions of people pursue financial relief through the United States Bankruptcy Code¹ each year. In many cases, bankruptcy can significantly improve a person’s financial situation, and in some cases may be able to help that individual keep his or her home or other important assets. There are various reasons that people file for bankruptcy, many of which are situations that have occurred through no fault of their own.  While bankruptcy is not for everyone, it is highly advisable for anyone who is having difficulty keeping up with their financial obligations to discuss their options with an experienced Long Island bankruptcy lawyer.
Medical Debt – When people are involved in accidents or fall ill unexpectedly, they often incur significant expenses associated with medical treatment. Even a brief stay in the hospital can result in thousands of dollars of medical bills, which if unpaid, have the potential to ruin your credit rating and make it difficult to obtain financing on favorable terms. Fortunately, in many cases, bankruptcy can help eliminate unpaid medical debt.
Credit Card Debt – The average American household carries several thousand dollars of credit card debt. These debts often have extremely high interest rates and can easily spiral out of control for people who get behind on their payments. In many cases, Chapter 7 bankruptcy can eliminate a person’s credit debt and provide them with a fresh financial start.
Job Loss – When a person loses his or job it can cause serious financial problems, especially for people who do not have significant savings. When an income stream stops bills can easily pile up and quickly may become unmanageable.
Garnishments – Many people who are in debt or have unpaid judgments against them are having their wages garnished², meaning that a certain amount of each paycheck is being collected by creditors each month. This can make for an extremely difficult financial situation, potentially causing a debtor to get further into debt with other creditors. Fortunately, filing for bankruptcy can help immediately stop garnishments and may also eliminate the underlying debt or debts from which any wage garnishment stems.
Contact a Long Island bankruptcy lawyer today to schedule a free consultation
Anyone who is experiencing financial difficulties should explore whether bankruptcy may be able to help. To schedule a free consultation with Long Island bankruptcy attorney Ronald D. Weiss, call our office today at (631) 402-5967 or send us an email through our online contact form.
¹ http://www.law.cornell.edu/uscode/text/11
² http://www.dol.gov/dol/topic/wages/garnishments.htm