Ways That Bankruptcy Can Actually Save You And Your Family
No one really looks to go into bankruptcy, yet the courts are flooded with bankruptcy cases each year. While bankruptcy should be a last resort, there are instances in which filing for bankruptcy can be the best possible option for a family. There are certain times when discharging some debts can give a family a new start.
Stipulations for Filing for Bankruptcy
Filing for bankruptcy can be a long and drawn out process. The first step in getting a bankruptcy ruling is to search for the best bankruptcy lawyer Springfield has to offer. After finding a suitable lawyer, he or she will need to gain access to your financial records to see if a bankruptcy proceeding is possible. Some people who find themselves in serious debt will be unable to discharge their debt. One of the most common forms of debt that citizens cannot discharge in most instances is student loan debt. There are serious restrictions on filing bankruptcy because of student loan debt, but most other forms of debt can be adjusted through the bankruptcy process.
Filing for Medical Debt
One of the biggest reasons that Americans have to file for bankruptcy is medical bills. Few people can actually plan for a catastrophic medical expense. While most financial planners recommend saving a few thousand dollars for emergencies or even six to 12 months of income for the possibility of long-term unemployment, these sums will not be enough to handle many serious illnesses. If a family member were to need open-heart surgery or chemotherapy for a cancer diagnosis, the bills could run well into the hundreds of thousands of dollars. For some persistent forms of cancer or some debilitating traumatic injuries, the costs could even pass $1 million. Only the most extravagantly wealthy can deal with these expenses without insurance. Those who have extensive medical bills might need to file for bankruptcy so that they can start their financial lives over with a fresh start. Over time, the bankruptcy will fall off of a credit report, and a family can return to relatively normal operations.
Filing for Small Business Debt
Another reason many people can fall into bankruptcy is a business failure. Many small businesses are set up with a sole proprietor. Most of these businesses will fail, and creditors can come after the owner personally for any business debts. Running a business in many fields can require some hefty start-up costs, and those who are unable to make a business profitable quickly can soon fall into the bad graces of creditors. Trying to pay off everyone at one time can make meeting monthly payments very difficult. Instead of losing a home, filing for bankruptcy to take care of the debt from a failed business and can save a great deal of stress for a family.
The goal of bankruptcy is the discharge of some level of debt. It can also allow a debtor time to reorganize his or her finances so that they do not lose a home. While filing for bankruptcy will hurt a person’s credit score, it can cut down on the stress of having debt hanging over a household and also cut down on spousal arguments. Although it is a last resort, in some instances, it can be the best resort and can save a family.
Share this:
Category: Bankruptcy
