Filing for personal bankruptcy is a serious decision that should not be taken lightly. But, bankruptcy can be beneficial and allow you to get a fresh financial start. Here are a few reasons why you may want to file either a chapter 7 personal bankruptcy or a chapter 13 personal bankruptcy.
You Have Outstanding Medical Bills- A single trip to an emergency room can cost you $20,000 or more. So, if you suffer a broken leg you and are required to have emergency surgery you can, in an instant, became literally destitute. Therefore, by filing bankruptcy you will likely be able to discharge outstanding medical bills.
Your Wages Are Being Garnished- When you are sued and a judgment is placed against you the creditor can garnish your wages. This means that money will automatically be taken out of your paycheck. This can be a devastating situation. For example, in Nevada a creditor can potentially garnish up to 25% of our wages. Thus, when you file for bankruptcy you will automatically stop the creditor from garnishing your wages.
Your Property is Being Foreclosed- Certain states allow a homeowner to be sued under a deficiency judgment when their house is foreclosed upon. A deficiency occurs when a bank loses money upon selling a house that is foreclosed upon. Basically, if your owe $100,000 on your house and the bank can only sell your house for $30,000 you can be sued for the $70,000 difference. So, by filing for a bankruptcy you can stop the bank from suing you for the $70,000 deficiency. (Please Note, that a deficiency judgment is only allowed in certain states. )
You Lose a Law Suit- If you lose a lawsuit the other party will then be able to collect on what you owe them via the judgment. By filing for bankruptcy you maybe able to stop the other side from collecting their judgment.
These are just a few reasons why filing for a bankruptcy can be useful. However, before filing for a personal bankruptcy you need to consult an experienced bankruptcy attorney. An experienced attorney will tell you the differences between chapter 13 and a Chapter 7 bankruptcy and will be able to advise you if bankruptcy is even necessary. The majority of all bankruptcy attorneys will give a you a free consultation. So, if possible you should get a second opinion. So, do not be cheap. See a an experienced bankruptcy attorney before you make any decision upon whether or not to file for bankruptcy.
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