1. To stop a garnishment. If your creditor successfully sues you, they can garnish your paycheck up to 25% in order to collect the debt. Bankruptcy stops garnishments once the case is filed. Chapter 7 and Chapter 13 both stop garnishments with Chapter 7 eliminating the debt and Chapter 13 bankruptcy allowing for a restructuring.
2. Eliminate Medical bills. Medical debt remains one of the most common reasons people file for bankruptcy relief. Chapter 7 Bankruptcy eliminates medical debt and Chapter 13 allows for a no interest repayment of the medical debt. To determine your Chapter 13 repayment options, contact me directly by calling (800) 580-7432 and I can give you an estimate over the phone.
3. Stop creditors from calling and harassing. Once you file for bankruptcy, creditors and debt collectors are required to stop calling and harassing you for the debt. This is because when you file for bankruptcy, the “automatic stay” mandates the creditors stop contacting you.
4. Change in employment, i.e. unemployed or loss of income has always been a reason people choose to get a fresh start with bankruptcy; this is compounded with a divorce
5. Prevent foreclosure or sheriff’s sale on your house – Chapter 13 Bankruptcy can stop foreclosure and allow you to reorganize. With many mortgage companies refusing to modify loans and not working with homeowners, Chapter 13 reorganization allows for a court-ordered repayment plan that stops a foreclosure or sheriff’s sale and allows the homeowner to keep their home and get caught up on their mortgage.
6. Bankruptcy can also prevent repossession of vehicles.
7. Filing bankruptcy can free up your budget so you can pay for the important things in your life like your mortgage, car payment, living expenses and medical expenses. When you file bankruptcy, it is possible to still keep your house, car and pension.
8. Prevent utilities from being shut off.
9. Credit card companies are reducing credit limits and debt payments are just too high. Chapter 7 can eliminate credit card debt and Chapter 13 allows for unsecured debt to be repaid for as little as 10 cents on the dollar. Call me directly at (800) 580-7432 to see what you qualify for.
10. Filing bankruptcy stops lawsuits and creditors from collecting and can eliminate or allow you to reorganize. I offer free phone consultations to determine your options.
These are a few of the more popular reasons why people file for bankruptcy.