Why Do People File for Bankruptcy?

Buchalter & Pelphrey

Ultimately, people file for bankruptcy when they are overwhelmed by debt. Bankruptcy can help someone eliminate, reduce, or reorganize their collective debt, easing their overall financial burden.

People can end up in bankruptcy for all kinds of reasons. For many, unexpected financial hardship is a common reason. Such hardship can occur as a result of unforeseen medical expenses or job loss, but it can also be the result of uncontrolled or poor consumer spending habits.

There are other reasons people file for bankruptcy, such as these:

  • Bankruptcy can end creditor harassment
  • Bankruptcy can prevent foreclosure
  • Bankruptcy can lift an order for wage garnishment
  • Bankruptcy can stop a bank levy
  • Bankruptcy can stop interest on debt from further accrual
  • Bankruptcy can put someone on a sensible debt repayment plan

While a debt discharge is the best possible outcome of Chapter 7 or even Chapter 13 bankruptcy, these are other important reasons to consider filing for bankruptcy.

Why Are People Wary of Bankruptcy?

Not everyone sees bankruptcy as the important debt relief solution that it is because of the impact it can have on their short-term financial situation.

It’s true that bankruptcy will adversely affect your credit score in the short run, but it’s easier than most people think to find creditors willing to help you build it back up. Also, bankruptcy only shows up on your credit report for up to 10 years – that means you won’t have to wait too long before it’s like it never even happened.

Who Can Help Me File for Bankruptcy?

If you are facing overwhelming consumer debt, you can seek assistance from our legal team at Buchalter & Pelphrey Attorneys At Law. With our legal support, you can learn more about your options for debt relief during this time and how bankruptcy can be less disruptive to your life than you may have previously believed.

For more information about how we can help, contact Buchalter & Pelphrey Attorneys At Law online now.

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