What are the common reasons for needing to file a bankruptcy case? There are many reasons why someone would need to file a bankruptcy case states a New Lenox bankruptcy attorney. To get a fresh start would probably be the first and most obvious reason. But what would cause somebody to fall behind on their bills to the point where they would need a fresh start? Well, many things could happen, one being loss of income due to either an injury, an illness, job loss, layoff or other complication that causes you not to be able to earn your current living. Once you fall behind on your income, it makes it difficult to pay your existing obligations, such as rent, mortgage, utilities, car payment, food, clothing, and other necessities, including items for your children.
Sometimes the need to file bankruptcy is simply due to overspending on credit cards and other forms of credit. Some people have a hard time resisting the urge to charge things just because they have available credit on their credit cards. This inability to say no can lead to huge fees in terms of interest, late fees, over-limit fees, and minimum monthly payments that continue to increase as the balance increases.
Another reason why people sometimes have to file Chapter 7 bankruptcy is for medical reasons. If someone has a medical condition or an illness or an injury and they do not have either medical coverage to cover that or the uncovered portion of the medical insurance is too excessive, then there is an inability to repay all of the medical providers, and you might have to file for bankruptcy in that regard.
There are other areas where someone would need to file for bankruptcy, such as an auto accident with no insurance. In the state of Illinois, if you are driving without insurance and you get into an auto accident and injure somebody, either physically or their property, you can be suspended from driving unless you do one of several things. First, if you file a bankruptcy, that will eliminate the debt to the personal property, and you will be able to get your license back. No. 2, you can work out an installment payment plan with that individual that you are involved in with the auto accident, and as long as you stay in that payment plan, your license will be reinstated. Thirdly, you can pay off the debt in full to that individual to prevent your license from being suspended. I have done many cases where a person has been involved in an accident and did not know that their insurance had lapsed. This lapse in insurance caused the Secretary of State to issue a notice that your license was going to be suspended unless you worked out some form of payment plan with the person that you hurt. For many of these situations, bankruptcy is the answer.
Those are the big reasons for someone needing to file a bankruptcy: income loss, medical, credit cards, driving without insurance. Now, of course there are other reasons why someone would need to file a bankruptcy, but those are the big four or five reasons why someone would have to file a Chapter 7 fresh start bankruptcy. One of the advantages of the Chapter 7 bankruptcy is it easily eliminates medical bills, credit card debt, personal loans, utility bills, past-due auto deficiencies and mortgage foreclosure deficiencies. If you are thinking of filing, be sure to explore the different types of bankruptcy prior to making a decision.