Consulting a Minnesota bankruptcy lawyer to help you declare yourself financially insolvent may seem like your lone alternative for monetary relief if you find yourself going down in debt, with a rising heap of credit card bills. It doesn’t mean you no longer have any financial obligations, although it does mean that some of your debts will be forgiven. Here are five different ways in which people end up bankrupt.
Loss of Income
Many people who face devastating loss of income due to job loss, a death in the family, or any other factor take refuge in the bankruptcy process. You may be left facing high costs of living that you didn’t have to worry about before, and before long your mortgage and vehicle payments may become past due. A Minnesota bankruptcy lawyer can help you with the process so you can reorder your finances to go with your new lifestyle.
Studies have shown that one of the main reasons why people go bankrupt is major medical procedures that result in huge bills. Even people with medical insurance have had to file due to inadequate coverage. A Minnesota bankruptcy lawyer may be able to speak to your hospital or doctor, making them aware of the situation so they will relax your payment terms.
Many people who took out adjustable rate mortgages during the height of the housing bubble are now faced with soaring monthly payments as banks raise their interest rates. If you fall into this category, you should speak to a Minnesota bankruptcy lawyer to know what your options are. In some cases, filing bankruptcy can help you cancel a second mortgage as well, so if you’re struggling with any such “junior liens,” mention it to your Minnesota bankruptcy lawyer.
Excessive Credit Card Debt
A lot of the individuals who file for bankruptcy do so as a consequence of excessive credit card debt. A Chapter 7 bankruptcy will entail liquidating assets to fund your outstanding credit card debt, while a Chapter 13 will allow you a three- to five-year repayment plan to satisfy your creditors. It’s interesting to note that it sometimes costs more to file bankruptcy than pay off credit card debt, especially when you take cost of the former into consideration (including the county filing fee and the cost of your Minnesota bankruptcy lawyer).
Lawsuits and wage garnishments are usually ordered by the courts or a government authority following an appeal by a creditor or other receiver. This situation often wreaks havoc on an individual’s finances, forcing him or her to file for bankruptcy. All wage garnishments become null once you consult your Minnesota bankruptcy lawyer and file your case in the appropriate court.
If you do decide to file for bankruptcy, your first step should be a consultation with a competent Minnesota bankruptcy lawyer. He or she will file a claim at your local bankruptcy court and state your case before a judge. You’ll need a list of all your creditors, even those you owe just a small debt to. They will no longer be allowed to contact you once you submit a bankruptcy petition.
If you’re stressed over your income and still not capable of meeting your financial obligations, bankruptcy may be the only route left open to you. Bankruptcy does not mean you will remain eternally out of favor with creditors, contrary to popular belief. It does, however, have short-term implications. You’ll be unable to get a loan, be employed with local government or operate your own business, but on the upside, you’ll have a better handle on your finances.
Minnesota Bankruptcy Lawyer: 5 Reasons why People Go Bank