Six reasons people choose Greensboro bankruptcy
Image Source: Pixabay.com
Millions of people file bankruptcy in America and thousands here in North Carolina, with more than 100 cases each month coming from Greensboro according to Middle District court statistics. In Greensboro, the most recent stats show that roughly half of bankruptcy filers choose Chapter 7 bankruptcy and half Chapter 13. In most cases of bankruptcy, there is a major life event that causes problems. Here is a look at the most common reasons people file Greensboro bankruptcy.
#1 Lengthy Unemployment
Many people don’t have much in the way of savings so any period of unemployment can exert financial pressure. The longer the joblessness goes on, the worse the financial predicament can grow. Most bankruptcy filers are not unemployed but might have experienced unemployment in the months (or even years) before they filed. While greater than 90% of bankruptcy filers are employed at the time of filing, roughly 40% of filers count job issues among the issues that led to them filing Chapter 7 or 13.
Divorce is a common attribute among bankruptcy filers. Bankruptcy isn’t typically a cause of divorce, but divorce can contribute to bankruptcy. Close to a third of bankruptcy filers, according to Simple Dollar, were either separated or divorced at the time of their bankruptcy filing. Divorce increases living expenses due to maintaining two households and many divorcing couples might already have money problems. In many cases, filing Greensboro bankruptcy before divorcing can give better results than divorcing first.
#3 Medical Expenses
Even with the passage of the Affordable Care Act, the specter of medical bankruptcy has not disappeared. Even for those that get a healthy tax kickback to help with premiums, most ACA plans come with hefty deductibles and co-insurance. With a $6,000 average deductible per person, even a minor medical issue can prove unaffordable. To complicate matters, serious illness comes with other costs such as medications and time off work. A health crisis can prove financially devastating.
#4 Unexpected Expenses
This is a broad generalization but covers any financial crisis for which you’re not prepared. It can be your house burning down when you have inadequate (or no) insurance. Or it might be your car dying and you having a several thousand-dollar repair to keep you on the road. If you have little (or no) savings, anything that causes your expenses to spike can wreck your finances. Unexpected expenses can force you to max out your plastic or drain your savings putting you in a precarious position.
#5 Tax Debts
Past-due income taxes can prove a challenging debt to overcome because the IRS and North Carolina revenue agencies have tremendous power when it comes to collections. Both the federal and state tax authorities can garnish wages, bank accounts, and attach liens to your home and other assets. But Greensboro bankruptcy can be an effective tool to discharge certain tax debts. For recent tax debts (incurred within the past two years), discharge isn’t possible, but filing can buy you more time.
#6 Student Loans
Federal student loans can be last your whole life. There is no statute of limitations on federal loans. Student loan debt collectors working for the government can garnish wages, take your tax refunds, and attach assets. In some Greensboro bankruptcy cases, student loans might be dischargeable depending on your circumstances. If not, then bankruptcy can still help unload other debt to make it easier to pay student loans and buy time to get on a more affordable payment plan.
No matter what circumstance has caused your financial difficulty, bankruptcy might be the best solution for your future. To find out more about the benefits of Greensboro bankruptcy, contact the Law Offices of John T. Orcutt. Call +1-919-646-2654 now for a free appointment at one of our convenient locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.