Is A Shortage of Cash A Prime Indication That Bankruptcy Should Be An Option?

Job termination is probably one of the top three reasons why people come in to seek bankruptcy relief. Most are probably receiving unemployment, which might be enough to keep them in their homes and keep them paying the utilities and necessary monthly expenses, but the credit card payments and things like that would suffer. The credit cards are probably the main reason people come in after they have been terminated from a job. They want to save their house and keep their family together, but then they have 20, 30 or $40,000 of credit card debt and there is just not enough money coming in to take care of that number. This could be called unnecessary debt, because it is not considered a necessity like food, clothing and keeping a roof over their heads. Getting rid of the credit card payments can give moderate relief and may give the person an ability to ride out the storm until another job or some other source of income is found.

Should Someone Consider Bankruptcy If Their Income Is Less Than Their Expenses?

A reduction in income would be about the same thing as losing a job, because they would have to maintain their necessary expenses every month like rent, the mortgage, utilities, food, clothing and medical expenses including maybe having to pay for their own medical insurance. The credit card and payday loan payments force people to have to consider bankruptcy to get rid of those. After losing a job or reducing their income, a lot of people find themselves going to these payday loans, which I would advise anybody to avoid. It is a merry go around that they will not be able to get off of unless they file bankruptcy to take care of the credit card payments, payday loan payments and any type of secured or unsecured loans. Some people might even decide to get out of the car that they cannot afford to pay for anymore if they have a reduction in income, so filing bankruptcy would help them realize those goals and get rid of a lot of debt, and that will help them survive until their income picks up or they can find another job.

Is It A Sign That Someone Should Consider Bankruptcy If Their Wages Were Being Garnished?

In the state of Ohio, where I practice, creditors can garnish wages and take up to 25% of their check from someone who they sue and get the judgment against. For a lot of people who are living paycheck to paycheck, it can be very devastating to have 25% of their income going to a credit card payment or to a creditor when they still have all of their other bills to pay. First of all, employers do not like to see their employees being sued and garnished, because it shows a possible lack of responsibility on their part. A bankruptcy would stop garnishments, and in fact a lawyer would usually be able to stop any garnishment before it even starts. The best time for a person to see a lawyer would probably be after they receive notice they are being sued, because the bankruptcy would stop any further progress of a lawsuit, so they would not even get to the judgment and the garnishment stage.

Garnishments are a big problem, and people are being sued for not paying their credit card bills or medical bills. A lot of medical debt is being sued for right now, more than has been in the past. Hospitals and doctors used to accept a minimum payment every month as long as the person paid them, but they do not operate like that anymore. They want their money and they want it fast, so there have been a lot of medical lawsuits. Bankruptcy stops any type of lawsuits, stops any type of garnishment and allows the person to maintain and keep all of their other bills up to date.

Should Someone File For Bankruptcy If They Are Still In The Hole Even Though They Are Doing Everything To Pay Debts On A Regular Basis?

This would mean that the person's expenses exceeded their income, and they were not able to maintain their rent or mortgage, and they would not be able to pay all that debt and maintain their lifestyle. They would have to get on a budget and get rid of all that credit card debt or the medical bills that are holding them back, because bankruptcy would relieve the person of any obligations on those debts. Bankruptcy is a serious matter and it would be on the person's credit report for ten years, although most people recover in about two to three years. Some clients who filed a chapter 7 bankruptcy bought new homes within two years, so although it is a serious matter, the person would recover because everybody does and it might help them to balance their budget and get rid of some of the unnecessary expenses they are dealing with.

Should Someone Consider Bankruptcy If They Are Constantly Catching Up With Bills And Utilities Are Being Shut Off?

Someone having their utilities shut off means they are living paycheck to paycheck, and they cannot afford the lifestyle they were enjoying at that time. Someone who was behind on their utilities could file bankruptcy on their utilities and get the utilities turned back on, but the utility company would then require an additional security deposit which would usually be about one and a half times the average monthly bill. So although utilities can be bankrupted, in order to keep the utility the person would have to sign a new contract with the utility company; a person cannot be denied a utility service for filing bankruptcy, but a security deposit may be required to have service turned on. A lot of clients who come in are very far behind on their utilities, but that is taken care of through a bankruptcy.

For more information on Applying For Bankruptcy, a free initial consultation is your best next step. Get the information and legal answers you're seeking by calling 330-591-4729 today.