While it may seem fairly obvious why people file for bankruptcy—they are drowning in debt and are unable to pay their bills—you might be surprised to find, that in most cases, it goes much deeper. In fact, the primary reasons Americans end up filing for bankruptcy include:
- A Harvard University study found that medical expenses are responsible for about 62 percent of personal bankruptcies in the United States. Even those with health insurance can be left with co-pays and deductibles they are simply unable to pay.
- The second most common reason for bankruptcy filings is job loss. Since many Americans are forced to live paycheck to paycheck during “good” times, the loss of a job can be financially devastating.
- Overspending and bad financial decisions actually comes in a distant third after medical expenses and job loss as a reason for filing bankruptcy.
In short, good, hardworking people can end up filing for bankruptcy as a method of getting debt relief and relief from creditor abuse. Harassing phone calls from creditors can make your life miserable, and can be a motivating factor in the decision to file for bankruptcy. Creditors do not care about your personal financial problems or why you have been unable to make your payments. They want their money and will go to any length to get it, sometimes even taking actions which are borderline illegal. Bankruptcy can put creditor demands on hold, and can put a decisive end to harassing creditor abuse.
Although nobody wants to file bankruptcy, there are situations where it really can be the best decision. Bankruptcy can give you a fresh start, allowing you to do better with your finances and make better choices this time around. If you are uncertain as to the advisability of filing for bankruptcy, or have questions, an experienced bankruptcy attorney can not only answer those questions but can also take care of the complicated paperwork, ensuring all applicable deadlines are properly met. The Oklahoma bankruptcy attorneys of Forbes & Forbes believe “Bankruptcy is not a sign of defeat, but a step toward a new future.” We can help you achieve a happier life through a financial fresh start.
Is Bankruptcy the Best Choice for Me?
There are a variety of factors which will go into your decision about whether or not to file bankruptcy. You may feel that you are at the end of your financial rope with nowhere to turn and that there are no alternatives to bankruptcy. Depending on your specific financial situation, this may or may not be true. It’s always a good idea to educate yourself thoroughly about bankruptcy, and understand how it will affect you in the long run before you make a final decision. For most, this education comes in the form of a knowledgeable Oklahoma bankruptcy attorney, who can help you determine whether bankruptcy is right for you.
Types of Bankruptcy
There are essentially two types of bankruptcy in the United States, or two options for the majority of consumers. Of course, there are additional options for more complex situations and business bankruptcies, but Chapter 7 bankruptcy and Chapter 13 bankruptcy are the two primary types most consumers will consider. Chapter 7 bankruptcy is often known as “straight bankruptcy,” and involves a process where the debtor essentially turns over all of his or her property (which is not exempt), to a court-appointed trustee who converts the property to cash and distributes it among creditors. Once the process is over, the debtor will receive a release of all debts which were deemed dischargeable, usually within three months. This gives the debtor a fresh start. Many wonder whether a bankruptcy will destroy their credit. In fact, most of those who are at the point of bankruptcy already have a bad credit score, simply from failure to make payments in a timely manner. After you go through the bankruptcy process, you can then begin credit repair through slowly rebuilding your credit.
Chapter 13 bankruptcy is a bit more complicated and is generally known as restructuring bankruptcy. Those who want to pay off their debts will be able to do so over a period of thirty-six to sixty months. Those who want to keep non-exempt property find Chapter 13 bankruptcy much more appealing. Chapter 13 bankruptcy may be the best choice for those with a predictable income which is adequate enough to pay normal living expenses as well as the monthly payment to Chapter 13 debts. If your home is in foreclosure, a Chapter 13 bankruptcy filing can stop foreclosure proceedings, which is a decided benefit for many. Before deciding on either type of bankruptcy, you must check the requirements; your income could be too high to file for Chapter 7 bankruptcy, or your income could be too low and your debts too high to file for Chapter 13 bankruptcy.
How We Can Help
It is important to remember that bankruptcy may or may not be right for you. Perhaps you may decide—after speaking to an experienced Oklahoma bankruptcy attorney from Forbes & Forbes, and carefully considering your financial position—that there are better alternatives. For example, you could decide to take out a home equity loan, consolidate your current loans, receive a loan from a family member, or drastically cut your monthly expenses. On the other hand, bankruptcy could be just the thing you need for debt relief, allowing you to get away from creditor abuse and begin your credit repair. Confidentially speaking to a knowledgeable bankruptcy lawyer from Forbes & Forbes can be the first step in achieving these goals. Whether you’re in Midwest City, the Oklahoma City metro area, Oklahoma County, or another location in our great state of Oklahoma, contact a Forbes & Forbes bankruptcy attorney today.