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5 Reasons to File for Consumer Bankruptcy

Though many are reluctant to file for bankruptcy, it’s an effective way to achieve a fresh financial start. Filing isn’t about avoiding debt; rather, it helps you to gain the court’s approval and form a plan of action to deal with the situation. Here, you’ll learn the most common reasons to hire a bankruptcy attorney in Rockford, IL.

Medical Bills

Many people file for bankruptcy because they can’t afford to pay their medical bills. Medical treatment is costly, but sometimes, it’s necessary. If you or your family members are in a similar situation, consider talking to a bankruptcy lawyer to learn about your rights.

Job Loss

Sometimes, people lose their jobs and must make quick adjustments to their spending habits. If this applies to you, bankruptcy may help, but it’s important to choose the right type. For instance, Chapter 7 discharges unsecured debts, while Chapter 13 reorganizes them. Understanding your legal rights is crucial, and a bankruptcy attorney in Rockford, IL, will help you to make sound decisions.

Collections

The average household carries more than $15,000 in credit card debt, much of which is eventually turned over to collections agencies. These agencies often put enormous pressure on debtors, but a bankruptcy petition will eliminate these debts.

Predatory and Upside-Down Mortgages

If you can’t make your mortgage payments, you may consider bankruptcy as a way to get through tough times without giving up your house. Most areas have homestead exemptions that help debtors reduce their monthly payments, prevent foreclosure, and exempt their home equity from being put into the bankruptcy estate.

Separation or Divorce

When a divorce or separation occurs, it requires a careful examination of your financial situation. For example, the judge may order a party to pay alimony, child support, and other fees. In many cases, property must be sold or distributed, and couples must change their spending habits. If these problems become too much to handle, bankruptcy is a viable solution.

Call the Crosby Law Firm to schedule an appointment or visit online today to learn more.

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