The Truth About Filing for Bankruptcy

Filing for Bankruptcy

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Few English words are less understood and more avoided than the term “bankruptcy.” This is because there’s a stigma attached to it that makes people feel uncomfortable. Therefore, many people who work as a bankruptcy attorneys find themselves going out of their way to assure their clients that when they file for bankruptcy,it isn’t a blemish to their reputation or character. Bankruptcy isn’t a punishment. It’s a chance to start over again.  Let’s take a moment to dispel some of the other myths that a bankruptcy attorney may hear each day.

Reckless spending isn’t the primary reason why people file for bankruptcy.

One of the most popular myths surrounding bankruptcy today is that the person who files has been reckless with their money. While this is sometimes true, this typically isn’t true at all. According to national surveys, there are three main causes that lead people to file for bankruptcy – none of which are related to frivolous spending.

Many people have huge medical bills due to a catastrophic illness.

According to one Harvard study, 62% of people who are filing for bankruptcy are doing so for this reason. People may be able to pay their bills just fine until some catastrophic illness or car accident suddenly creates substantial medical bills for them. Since this debt is unanticipated, most people don’t put any money aside for this. Ask any bankruptcy attorney, and they’ll tell you that a lot of these people also don’t have insurance, they have such a high deductible that medical care is unaffordable, or the condition they’re suddenly diagnosed with isn’t covered.

People who lose their jobs tend to rack up a lot of debt.

Unfortunately, today’s economy has led to a lot of job losses that people had no forewarning of. Many of these people will need to undergonew training to get another job. While training, they’ll have to live off their “emergency funds” if they have any. This is worse if they recently bought a home or new car, maybe even have children whose college tuition they’re responsible for paying. If they’re unable to handle these bills while trying to get a new job, they’ll fall into an even steeper hill because, as any bankruptcy attorney will tell you, creditors don’t wait for anyone.

Divorce commonly causes people to file for bankruptcy.

When a couple is experiencing financial issues before they start the divorce process, more than likely, the issues will be even greater after their divorce. This is because it’s challenging to maintain the same lifestyle you had while married when you only have half of that income available now. Some of the financial obligations that could be managed while married (e.g., credit card debt and mortgage payments) pose a new challenge once you’re divorced.Plus, there are now new bills (e.g., alimony, childcare, legal fees) that you’ll also be responsible for.

Before you file for bankruptcy, make sure you are well prepared for the process. The best way to do this is to find an experienced bankruptcy attorney whom you can trust. For this, we invite you to check out the Weller Legal Group in Clearwater, FL, today.

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