Why is Bankruptcy a Good Option?
Bankruptcy serves a purpose – to help Americans get out of an impossible situation and start over with a clean financial slate. There are many ways out of debt, but the power of bankruptcy is hard to match. Filing bankruptcy brings consequences that you should understand before moving forward, and not everyone is eligible to file bankruptcy, but if you are in trouble financially and your debts are piling up, bankruptcy may be a good fit for you.
Why Would Anyone File Bankruptcy?
Bankruptcy can be scary, but many Americans face the reality of not being able to pay the bills. If you find yourself in a situation where you will not be able to pay down your debts, bankruptcy is designed to help you! The bankruptcy code was designed to offer a fresh start to those who find themselves buried in debt.
You should not buy into any negative stigma of bankruptcy. Thousands of Americans use the bankruptcy code every year, and the most common causes for their debt are outside their control:
- Medical Bills – the most common cause of bankruptcy is a massive medical expense from a surgery or chronic illness. Americans without medical insurance run the risk of being plunged into crushing debt every day. A single accident that results in a hospital stay can quickly force anyone to consider bankruptcy.
- Job Loss – whether you’ve been fired, laid off or quit your job, losing your main source of income will mean that bills pile up quickly. With our slow economy today, it can be difficult to bounce back quickly.
- Divorce – besides the emotional turmoil to your family, going through a divorce brings wave after of wave of massive expenses. The legal fees alone can spiral out of control, and the ensuing division of assets, child support, and spousal support payments can prove to be too much.
- Unexpected Expenses – natural disasters, theft, liability for an accident, lawsuits, the list of unexpected expenses go on and on. These disasters can befall anyone, and there’s no shame in needing help to deal with them.
Is Bankruptcy a Good Option for Me?
Whatever the reason for your debts, you need to consider your personal situation. There are some negative consequences to filing for bankruptcy:
- Legal Fees – the fees charged by any attorney vary depending on your location and the details of your case. You should speak to an attorney in your area to find out how much bankruptcy costs in your case.
- Negative impact to your credit score – a bankruptcy will appear on your credit report for up to ten years, and it will have a negative impact on your credit score during that time.
But these downsides often pale in comparison to being able to wipe out your bills and start fresh. If you simply cannot make progress on paying down your debts, bankruptcy may be a solution for you. A clean slate provided by bankruptcy can let you rebuild your household finances and put you in a much better position financially in years to come.