Are your bills piling up to the point where you’re considering bankruptcy? If so, you’re not alone. Each year, an estimated 322 per one million American adults file bankruptcy, or roughly one out of 70 households. The causes of bankruptcy are numerous, and every situation is different. If you are experiencing issues with debt, it may be time to find a bankruptcy lawyer to find a reasonable solution.
First, what is bankruptcy? Bankruptcy is either the liquidation or reorganization of assets, and it can either eliminate debt entirely or create a court-approved plan to pay back a certain amount over a specific period. There are two types of personal bankruptcy: Chapter 7, which is a liquidation, and Chapter 13, which is the reorganization. The type of filing depends on which option is better for the individual.
Many situations can lead to a bankruptcy filing and push a person to find a bankruptcy lawyer. While these circumstances may be upsetting, there is hope for those who are considering a Chapter 7 or Chapter 13 filing. Here are three times when you might have to file for bankruptcy:
Debt
One of the biggest motivators for a bankruptcy filing is debt. This debt can come from anywhere: mortgage, credit cards, and even payday loans. Debt can damage one’s credit rating and cause undue hardships. As a result, the debtor will have two options for personal bankruptcy. Filing for Chapter 7 can erase that debt completely, but it could result in the loss of a home, vehicle, and other assets. A Chapter 13 filing, however, will find a manageable payment plan for the debtor, and may allow him or her to keep a home rather than foreclosing on it. In these cases, it is best to find a bankruptcy lawyer who can determine the best course of action.
Divorce
It’s an unfortunate fact that nearly half of all marriages end in divorce. For some couples, it can be difficult to keep paying bills on only one income. Just as debt can push some individuals and families into bankruptcy, divorce can also do the same.
Medical Bills
In the United States, medical bills account for most of the country’s bankruptcy filings. The American Journal of Medicine found that 62% of all bankruptcy filings in the U.S. resulted from illnesses and medical bills. Working with an attorney to file for bankruptcy could help families who have been stricken by injuries and accidents.
Filing for bankruptcy is a lengthy process, and a Chapter 13 filing can cost between $1,500 and $3,000 to file and complete in the U.S. The fees for lawyers for bankruptcy cases average between $1,200 and $2,500, depending upon the services required. Those who are wondering how to find a good bankruptcy lawyer should look for an experienced attorney to represent them in court. There is no set way of finding a lawyer, but it is important to be aware of the process.
Working with a local bankruptcy lawyer may help in these situations, but speaking with an attorney in person is the best way to determine how to approach your case. If you have other questions, feel free to leave a comment below.
