If you’re having a difficult time, you might be wondering if it’s time for you to file for bankruptcy. You may be asking, “Am I eligible for Chapter 7 bankruptcy? Do I need to find bankruptcy attorneys?” Here’s some information about your financial situation.
You Need to Qualify Financially
You need to show a certain level of financial difficulty to qualify for bankruptcy. You’ll have to take a means test to see if your income falls into the guidelines for bankruptcy qualification. You’ll also need to show that you somehow make less than what you owe.
You Need to Have Enough Debt
You also need to have enough debt on your plate for bankruptcy. You should qualify if you have more than two or three credit accounts of various types. You won’t be allowed to file bankruptcy for credit card debt only. You will have to make a list of every account for which you owe money, as well as the account number, appropriate balance, and other information. The process of filing for bankruptcy can be time-consuming and challenging, but bankruptcy attorneys can assist you.
Your Credit Will Suffer
Bankruptcy and state taxes are another trick area. The courts will not disregard your tax debts, and you may be unable to gain approval for any type of major credit for seven to 10 years. The answer is yes, if you’re asking, “Are personal bankruptcies public record?”
Have any other questions for us about seeking out bankruptcy help from a Chapter 7 bankruptcy attorney? Feel free to ask by leaving a comment below. (Read more about this topic at this link.)
Bankruptcy is often seen as a last resort for getting out of mountains of unmanageable debt.
However, it’s more common than you may think. Throughout 2013 alone, approximately 1,071,932 people chose to file the Chapter 7, Chapter 11 or Chapter 13 bankruptcy timelines. Chapter 7 bankruptcies are by far the most common, with 728,833 of these bankruptcies filed that year.
But what are the most common causes behind getting help with filing bankruptcy and ultimately filing Chapter 7 bankruptcy? What situations leave people with no other choice but to legally discharge all their debts? To learn more about why people file bankruptcy, check out this list of the top three leading factors behind Chapter 7 bankruptcies in the U.S.
Unplanned medical expenses
Believe it or not, but the shockingly high cost of seeking medical treatment is the biggest factor that drives Americans into bankruptcy. 62% of all bankruptcies filed stem from an inability to pay one’s medical bills. Because serious illness and injury is impossible to predict, it’s almost impossible to plan or save up for these costs — even if you have health insurance.
Loss of employment
The second most common cause of bankruptcy? Being fired or laid off from one’s job. About 22% of personal bankruptcies are filed due to this loss of steady income, which makes it impossible to pay one’s bills on time or at all. For people who have become unexpectedly unemployed, a bankruptcy is often the only option available to get back on one’s feet.
Out-of-control spending
A mere 15% of bankruptcies are filed because the filer was unable to control his or her spending. By maxing out one’s credit cards and opening up more credit cards to pay off existing debts, it’s easy to find oneself in an ever-deepening hole of debt. However, a bankruptcy can be the wake-up call many people need to turn their finances around.