1). Common Reasons:
- Medical :– a medical crisis can turn your financial world upside down, even with insurance. There are just some treatments that are not covered, or you haven’t met the deductable, or the co-pay is draining your resources. Whatever the reason, bankruptcy can help manage overwhelming medical debt.
- Divorce :– face it, when you go from a two adult household to one, there are expenses that are harder to meet. Also, credit purchases may have been made with the expectation that there would be two incomes to make the payments. Of course, even the process of divorce can be expensive.
- Predatory Lenders :– whether it is credit cards with outrageous interest and “gotcha” fees, or a payday loan that extorts payments by threatening to repossess property or file criminal charges, there are just some creditors that make their living with sophisticated loan shark techniques that put someone at a disadvantage. Bankruptcy can level the playing field.
2). Unique Reasons:
- Provide an Inheritance :– if a person dies owing debt, then their property must be used to pay off the debts, sometimes leaving nothing for the family to inherit. If the individual files bankruptcy prior to passing, then the debts will be discharged and the heirs will be able to receive property from the estate.
- Buyer’s Remorse :– sometimes an individual finds themselves having “overbought” on a big ticket item; maybe they didn’t really need a motorcycle, boat or timeshare, but the salesman pushed them until they made the purchase. Now they have looked at a future of unending payments, and want out. The dealer won’t “undo” the sale, and if they sell to another individual they will have to take a loss – but with a bankruptcy they can just give it back and walk away, with no penalty fees or deficiencies to pay.
The information contained on this page is a general summary and there may be exceptions or additional requirements that apply in an individual case. Information is given for demonstrative purposes only and should not be relied on without consulting an attorney. Specific advice can only be given by an attorney who is familiar with facts pertinent to a specific case. Communications in the context of this page shall not be construed to form an attorney-client relationship. Certain aspects of bankruptcy are state specific.