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Unfortunately, even if you carefully budget every month and strive to keep debts to a minimum, circumstances outside your control can still throw your finances into disarray. If you’ve fallen behind on your debts, bankruptcy is an excellent solution that allows you to discharge some accounts and potentially avoid foreclosure. While every situation is different, below are a few of the most common reasons people find themselves searching for debt relief.

Why Do People File for Bankruptcy?

1. Medical Debt

A medical emergency can cost thousands of dollars, even if you have health insurance. By some estimates, over 65% of bankruptcy filings are related to medical debt, which can quickly wipe out savings. Fortunately, both chapter 7 and chapter 13 bankruptcies allow you to discharge medical bills and start rebuilding your finances.

2. Divorce

bankruptcyWhen a marriage comes to an end, each spouse may be responsible for a share of the marital debts. These obligations can make it impossible to begin building a new life, especially with the reduction in income divorce usually brings. Filing for bankruptcy beforehand allows both of you to start over again with a clean slate.

3. Job Loss

Temporary job loss can be a financial burden, especially for those who don’t have significant savings. Being out of work for just a few weeks can leave you behind on credit cards, the mortgage, and car payments, putting you in a position that can be hard to get out of, even if you find work relatively quickly. A chapter 13 bankruptcy can help you out of this challenging situation by allowing you to make up arrears on secured debts.

 

If you’ve fallen on hard times, the legal team at Frances H. Hollinger is committed to helping you get the debt relief you need. They proudly help struggling borrowers throughout Foley, AL, free themselves from burdensome debt and claim the second chances they deserve. Visit their website for more information on their bankruptcy services, or call (251) 943-9030 to arrange a consultation today.

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