Most people try to avoid bankruptcy and consider it a last resort, but under the right circumstances, it can be a lifesaver. No one wants to find themselves in debt, but chapter 7 can erase what you owe and give you a clean start. Here are four of the most common reasons that people file chapter 7 bankruptcy.
1. Pending Foreclosure
If you’re struggling with finances and are on the brink of home foreclosure, chapter 7 can halt the process. This can buy you several months to get your payments under control or renegotiate your loan. If your mortgage is current and you’re filing for other reasons, it’s likely you will keep your home.
2. Major Change in Employment
Another common reason for bankruptcy is when there has been a major change in employment. If you or your spouse has lost a job and bills are accumulating, filing bankruptcy Everett WA is a viable solution. Chapter 7 will eliminate your debt and give you a brand new start.
3. Overwhelming Medical Expenses
If you have substantial medical debt but good credit, you might be eligible for a grant or a payment plan. However, if your debt ranges into the thousands and you have no way to pay, chapter 7 bankruptcy may provide relief. It will also discharge other debt you’ve fallen behind on.
4. Extreme Credit Card Debt
Perhaps the most common reason people file chapter 7 bankruptcy is because of extreme credit card debt. If your spending has gotten out of control or you’ve had emergency expenses, bankruptcy can help. However, it’s important to note that luxury goods or cash advances before you file are not permitted.
If you find yourself drowning in debt, chapter 7 bankruptcy may be the answer. When you’re looking at a foreclosure or overwhelming credit card debt, contact an attorney to discuss your options.