Top reasons people file for chapter 7 bankruptcy and how it can help them get out of debt?
Many people who have more debt than they can handle decide to file for chapter 7 bankruptcy. Bankruptcy is not a decision that should be made in haste. Even though it does help a person get a fresh start, it can be very costly. Bankruptcy can also stay on a person’s credit report for several years.
There are several reasons that people decide filing for chapter 7 bankruptcy is their best option. Below are some of the reasons that people choose to file for chapter 7 bankruptcy:
Health care in this country is very expensive. A person may end up with more debt than he or she can handle after visiting the emergency room just one time. Some surgeries can cost over $30,000. People who do not have health insurance or enough insurance to cover their medical expenses often have to take money out of their savings account. Many people do not have any extra money to pay for their medical expenses. That is why filing for bankruptcy may be the best option.
People who lose their job have to worry about how they are going to pay their mortgage or rent, car payments and other monthly expenses. Even if they have a savings account, it can be depleted very quickly. Additionally, many people who lose their job also lose their insurance. This can make it even more difficult to make ends meet.
While credit cards make it convenient to make purchases, one can very quickly end up in a lot of debt if he or she does not use them properly. Credit card companies typically charge very high interest rates, which make it hard to get out of debt.
Divorce can be very costly. Many people find that it is a lot harder to live on one income. Divorcees may also be faced with alimony and child support, which makes it harder for one to take care of his or her personal expenses.
How Can Chapter 7 Bankruptcy Help People Get Out Of Debt?
People who file for bankruptcy may be able to get the majority of their debts discharged. Personal loans, collections accounts, business debts, past due utility bills, attorney fees and social security overpayments are examples of some of the specific debts that can be discharged in bankruptcy. Student loan debt usually cannot be discharged, but there may be exemptions to this.