Deciding to file for bankruptcy is often seen as a last resort, but it doesn’t have to be. Many people are realizing that this solution provides a pathway to true financial relief, radically changing their lives for the better. In this article, we reveal the primary reasons that people just like you have decided to file for bankruptcy, highlighting the diverse circumstances that can lead to this decision. People choose bankruptcy for many reasons: here are some of the most common.

Sarasota bankruptcy firm

People Choose Bankruptcy for Many Reasons

  1. Lower Expensive Medical Bills: An unexpected medical emergency can quickly derail one’s financial health, leaving a trail of seemingly insurmountable medical bills. Chapter 7 bankruptcy, in particular, can significantly reduce or altogether eliminate burdensome medical debts. Individuals and families faced with sudden illness or injury may be able to navigate their recovery by filing bankruptcy and get out from under the weight and stress of the burden placed on them.
  2. Make Creditor Harassment Stop: The constant barrage of creditor calls and letters can exacerbate the stress and anxiety of financial strain. Bankruptcy immediately activates an automatic stay, halting most collection efforts from creditors. This includes aggressive phone calls, letters, and even lawsuits. This protection is one of the most immediate reliefs that bankruptcy can offer, giving individuals peace of mind as they work through their financial recovery process. For some, this peace is more valuable than anything else.
  3. Avoid Garnishment of Wages: Wage garnishment, where creditors take a portion of one’s earnings directly from their paycheck, can leave individuals struggling to meet basic needs. Chapter 7 Bankruptcy offers a shield against such actions, effectively stopping garnishments and allowing debtors to retain their entire income. Individuals can halt current garnishments and also prevent potential future actions – crucial for planning long-term.
  4. Achieve Relief from Student Loan Debt: While bankruptcy is generally not viewed as a direct solution to discharging student loan debt due to the stringent standards required for such discharge, it can still offer significant relief. Specifically, Chapter 13 bankruptcy allows for consolidating student loan debts into a more manageable repayment plan. Although not eliminating the debt, it can offer a glimmer of hope for those overwhelmed by student loans.
  5. Discharge Unsecured Debt: Declaring bankruptcy is akin to pressing the reset button on one’s financial obligations, especially when debts become insurmountable. Chapter 7 and Chapter 13 bankruptcy contain provisions that facilitate the discharge of various debts. This process primarily focuses on eliminating most unsecured debts, including credit cards, unpaid medical bills, and other personal loans.
  6. Halt Foreclosure Proceedings: One of the most daunting prospects for any homeowner is the threat of foreclosure. Chapter 13 bankruptcy allows individuals the chance to develop a repayment plan to address overdue mortgage payments. The ability to get back on track with your mortgage payments through a structured payment plan under the bankruptcy court’s supervision might be the sole factor allowing you to keep your home.
  7. Avoid Auto Repossession: Automobiles are essential for most individuals, facilitating daily commutes and everyday tasks. Bankruptcy offers a strategic avenue to avoid repossession or even compel creditors to return the vehicle if it has already been repossessed.

While these reasons are among the most prevalent for filing bankruptcy, an experienced bankruptcy attorney will recognize that everyone’s financial situation is unique. If you are facing fraudulent claims from creditors, are at risk of your utilities being shut off, or are trying to survive while any other issue is threatening your finances, bankruptcy may be able to help.

Ultimately, the goal of bankruptcy is to offer a fresh start, and for many, it represents a vital step toward reclaiming financial independence. To learn if bankruptcy is right for you, contact the Sarasota law offices of Richard V. Ellis today. We are here to help.