3 Reasons Why You May File For Consumer Bankruptcy | Financial ...

The consumers may decide to file bankruptcy in order to get a suitable solution to their financial worries. Chapter 7 bankruptcy cancel the debt of the consumers and sells their property to pay off the money that they owe while Chapter 13 bankruptcy enables the individuals to financially restructure and repay their debts back over a period of three to five years. Here are discussed the 3 reasons why you may file for consumer bankruptcy help.

1. Excessive medical bills ? Medical bills seem to be the one of the main cause of consumer bankruptcy. This has resulted in 62 percent of all bankruptcy filings. It is seen that above 80 percent of the people who filed for bankruptcy due to excessive medical bills had health insurance from before hand. However, the financial costs of some medical treatments often go beyond the limits of the health insurance policies of the consumers. In addition to this, many consumers are forced to file bankruptcy due to high co-pays.

2. High level of debt ? High level of debt are considered to be a common cause of consumer bankruptcy as per the study by the United States Department of Justice. The study illustrated that the national consumer bankruptcy filings started rising exactly two years after the national consumer debt level had increased. The consumers usually file for bankruptcy two years after taking on large debt. Certain factors such as job loss, divorce and greater availability of credit add up to the financial decisions of the consumers. The debt may appear in the form of credit cards and different kinds of loans. The individuals may opt to file for bankruptcy in order to stay away from the collections and wage garnishment process.

3. Avoid facing foreclosure ? The main reason why the consumers decide to file for Chapter 13 bankruptcy in the United States is to avoid facing foreclosure. In case of Chapter 13 bankruptcy, the court issues a collection against the mortgage company. This may prevent you from facing foreclosure. As such, the consumers formulate a suitable plan to restructure their finances and make late payments over a period of three to five years. The consumers make the late mortgage payments to a Chapter 13 bankruptcy administrator and not to the mortgage company. However, the consumers must continue to make their monthly mortgage payments under this plan.

An individual should decide to file for bankruptcy only when he finds no other alternative to pay off his outstanding debts. Bankruptcy hurts your credit score to a great extent. It increases the interest rate on your credit card, car and home loan and the premium that you pay to the different insurance policies. Speak up with one of the bankruptcy lawyers of your area in order to get bankruptcy help from them. The lawyers will surely make it a point to find out if you are the right candidate for filing bankruptcy.

Source: http://www.soloandata.com/3-reasons-why-you-may-file-for-consumer-bankruptcy/

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