Filing for bankruptcy is an extreme measure that people who are embroiled in debts can resort to. If done right, it can help preserve one’s peace of mind, save money and assist you in recovering your financial health. Unfortunately, the exercise can be time-consuming and expensive. It can also affect your credit score and impact on many other aspects of life. This article delves at reasons that make people resort to filing for bankruptcy.
1. If you follow your budget but you are still stuck
If you have been using a budget program but realize that you are financially stuck despite following it, you may need help. If you find that you cannot raise money to pay your debts, you may need to consider filing for bankruptcy. It is true that most people spend a huge chunk of their income on transport and housing. So in a case where you downsize and move to a smaller place but still find it difficult to pay your debts, filing for bankruptcy could help you.
2. When you face a foreclosure
Filing for bankruptcy is one of the methods you can use to put a stop to foreclosure. When you file the suit you receive prohibitive orders. They stop collection agencies or creditors from harassing you. Chapter 13 will help you catch up on your mortgage payment. It will also help in a case where the proceeds from the foreclosure sale are not enough to cover for the unpaid mortgage balance.
3. When you want to avoid a lawsuit
If a company you owe is about to sue you for a breach of a contract, filing for bankruptcy may stop the lawsuit. Also, if they sue you, defending the lawsuits may be expensive. So it would be better to stop it and have it discharged.
4. When you plan to receive property
If you are in debt and about to receive an asset as inheritance or as a discretionary bonus, it may be sensible to file for bankruptcy. It will help you keep the property even though it may have nuances.
5. If you are unable to pay student loan debt
If you are currently seeking employment and you are unable to pay for your student loan debt. Filing for bankruptcy could help you get out of the debt. But you need to consult a philadelphia bankruptcy lawyer before filing the case.
6. Credit card debt
If you rely on and use a credit card on a day to day basis, you may find yourself drowning in debts. If something happens and make it difficult for you to pay the debt, you may never lead a normal life. But filing for a bankruptcy case can help you escape the debt and organize your finances.
It is true that having debtors pursuing you can make it difficult for you to engage in productive activities. Thus, you can file a bankruptcy case to give you some reprieve. It helps to reduce the stress associated with debts and engage in productive activities. It allows you to organize your finances and pay the debts at a rate you can manage.