According to Epiq Systems, more than one million people in the nation chose to file for bankruptcy in 2012. As this shows, bankruptcy is not an uncommon choice for people in Kansas City to make, and for many is the best way to dig themselves out of a financial hole. Here are some signs that bankruptcy may be a good choice to make in the face of financial troubles.
First of all, many Americans are facing overwhelming credit card debt. They may be only able to make the minimum payments on their credit card bills, if they are able to make payments at all. In addition, they may even need to use their credit cards to pay for food, clothing or other essentials of life. If this is the case, it may be worthwhile to consider filing for bankruptcy.
In addition, senior citizens who are carrying a heavy load of debt while living on a fixed income or even seeing their pensions go down may consider filing for bankruptcy. For purposes of filing for bankruptcy, Social Security benefits may not be considered income and many retirement accounts are exempt from the bankruptcy process. Seniors may also be able to benefit from homestead exemption laws.
Another situation in which filing for bankruptcy may be a good choice is if one’s ex-spouse already filed for bankruptcy and the debts they face are in the names of both spouses. In this situation, bankruptcy might be the financial solution a person needs, particularly if the person has incurred hefty attorney’s fees and other divorce-related expenses.
Bankruptcy may also be a viable option for people who are facing overwhelming medical expenses that they simply cannot pay. Even people with health insurance can suffer from medical debt in the form of deductibles, co-pays and uncovered expenses. And for those without medical insurance, even a simple monthly prescription or a seemingly minor operation can lead to an unmanageable amount of medical expenses. By filing for bankruptcy, it is possible that a debtor’s old medical debts may be discharged.
Filing for bankruptcy is a big decision to make, and takes a lot of careful thought and consideration. Still, depending on one’s financial situation it could be the best way for them to wipe their financial slate clean and start anew.
Source: GoBankingRates, “5 Signs It’s Time to File for Bankruptcy,” Morgan Quinn, Feb. 18, 2015