Top reasons for Greensboro bankruptcy
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Greensboro bankruptcy offers a second chance for individuals who are drowning in debt. It can often provide needed breathing space and a path towards financial stability. But what makes people file bankruptcy? What kind of financial troubles lead to filing? Here are five of the most common reasons people choose this legal path to federal debt relief and protection from aggressive collectors.
1 - Overspending
Out-of-control spending is one of the least common causes of bankruptcy, but it does happen. Some people can’t (or won’t) control their spending or have a partner with poor financial habits who drags them down. Credit card debt can spiral out of control quickly. Living beyond your means is a terrible habit and results in debt spending, often via swiping plastic.
Once you max out your credit cards, there are late fees, over limit fees, and negative actions on your credit report that drop your credit score. Maxed plastic can lead to out-of-control finances where you can’t even make the minimum payments on your card balances. Fortunately, credit card debt is unsecured debt and can be completely wiped out in bankruptcy.
2 - Layoff
Job loss is one of the leading causes of bankruptcy. When a person loses their job suddenly, it can be shocking and problematic. When the unemployment crisis lingers, it can be financially devastating. Fortunately, the job market is healthy right now so for many people this is less of a problem than it was a decade ago at the height of the recession.
If you have an emergency fund, a brief gap in employment may not represent too much trouble. However, most people are unprepared for a lengthy bout of unemployment. If this is what wrecked your finances, bankruptcy can help unload debt accumulated while you were jobless. Waiting until you have a new job can be a strategic moment to file to make the most of your fresh start.
3 - Divorce
Divorce can be problematic on an individual’s finances, particularly if part of the acrimony in your marriage was money trouble. If you couldn’t pay your bills together as spouses, splitting into two households, which increases costs of living, likely won’t make things any better. Plus, when child support and alimony come into play, things get even more complex and costly.
Something to consider if you’re splitting is to sort out your money problems before you divorce so you can go your separate ways with less financial stress and drama. It’s often better to file bankruptcy as a married couple, divest yourself of debt, and then split with a clean financial slate so you won’t be left arguing over debt and bills for years to come.
4 - Student loans
Student loans can be financially arduous, and if your school debt is federal, there’s no statute of limitations to protect you. Student loan debt affects people of all ages. Even seniors are now weighed down by college debt. Sometimes it’s their own still lingering, and sometimes it’s debt they took on for their kids or grandkids.
Student loans can be a challenge to unload in bankruptcy, but it is possible. Private student debt is easier to ditch, but even federal loans can be lessened or discharged for some Greensboro consumers. If you can’t discharge your student debt, you may be better able to afford it once you shed other bills. That’s a good reason to pursue bankruptcy because of student loans.
5 - Medical emergency
Unforeseen medical emergencies can push you into a financial conundrum. An accident, unanticipated surgery, or illness that requires costly or ongoing treatment can cause a cash crunch. A medical crisis can be doubly challenging because not only can it drive up expenses, but it may also reduce your income if you can’t work because of the issue.
Anything that increases expenses and also drops income spells financial trouble. And for many struggling with medical debt, insurance coverage often isn’t enough to stave off a money mess. High premiums, staggering deductibles and co-insurance, plus out-of-pocket expenses can all add up to a devastating dilemma.
Whatever the reason you’re considering bankruptcy, it can be a good alternative to wallowing in debt, letting your credit score sink month after month, and dodging increasingly aggressive debt collectors. To find out more, read reviews from recent clients, then call +1-919-646-2654 for a free Greensboro bankruptcy consultation.
Come see us at the Law Offices of John T. Orcutt at one of our convenient locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington and get the fresh financial start you deserve!