What Are the Top Causes of Bankruptcy?
Sometimes, you need a fresh start, and that's exactly what Chapter 7 bankruptcy offers. Unlike Chapter 13, with Chapter 7, you won't need to make monthly payments to your creditors. Instead, all eligible debts will be discharged in exchange for selling some assets to help pay back creditors.
Multiple factors often lead someone to turn to Chapter 7, but typically, it's overwhelming debt combined with a lack of income to cover it all. The Craig Black Law Firm specializes in Chapter 7 and Chapter 13 bankruptcy filings. If you're in a place where you need help with your finances, I can help. Call me at 678-888-1778 or complete this confidential online form, and I'll be in touch.
Income Changes
In order to pay bills, you need regular income. That's why sudden unemployment contributes to many bankruptcy filings. The bills don't stop coming in simply because you're unemployed. A job loss is one of the top bankruptcy filing triggers.
Disability can also lead to a drop in income. If an illness or injury renders you unable to work, you won't be getting that regular paycheck, but you'll still have bills coming in. In addition to filing for disability benefits, you can file Chapter 7 to get out from under your debts. Your disability income will be labeled exempt from liquidation.
Change in Life Situation
A sudden change in marital status can also lead to bankruptcy. First, there's the cost of the divorce itself. You'll need to pay attorneys and court costs, which vary depending on how complicated your case is. But even without legal fees, divorce means splitting finances. If you were a two-income household, footing the full bill yourself can quickly drain your finances.
During and after divorce, bankruptcy can help you get rid of some of the debt you accrued as a couple. It can be a great time to offload joint assets in exchange for discharging your debts, giving you both a fresh start.
Mounting Bills
It's tough to talk about the causes of bankruptcy without mentioning medical bills. Even with health insurance, unexpected medical issues can cause some serious debt. In fact, medical bills so often cause bankruptcy filings that the term medical bankruptcy is sometimes used to describe it.
But bills don't have to be health-related to lead to bankruptcy. Credit card debt is a common contributor to Chapter 7 filings, along with other expenses not charged by healthcare providers. Your bankruptcy may be driven by a combination of medical bills, credit card debt, student loans, and a car payment you can no longer afford.
The Craig Black Law Firm and Medical Bills
The Craig Black Law Firm specializes in bankruptcy filings and can guide you through the process. If you're considering bankruptcy, contact me at 678-888-1778, and I'll personally discuss your situation with you. You can also complete our confidential online form for a callback.