More than half of all bankruptcies in the United States are a result of excessive medical expenses, according to a comprehensive and meticulous study conducted by Harvard University researchers. In their study, researchers discovered that over 1.5 million families had sought bankruptcy court protection because their insurance did not cover the costs of severe medical treatment and they lacked sufficient funds to pay the bills. Long-term unemployment ranked as the second primary cause of bankruptcy, according to the same study, and researchers noted that the rates of these filings have increased by more than 50 percent since the severe recession began.
Bankers and financial planners underscore the gravity of filing for bankruptcy, emphasizing that it should be a last resort. If, for instance, you are behind on your mortgage payments and fear foreclosure, you should carefully consider federally guaranteed mortgage refinancing or loan modification. Congress and the administration have now approved three different mortgage relief programs, and more than ten million families are eligible. Similarly, if you have amassed a substantial amount of credit card debt, qualified professional credit counselors may be able to assist you in renegotiating your obligations and satisfying your creditors without severely harming your credit score. In addition, if you owe a substantial amount of back taxes, an attorney or enrolled agent can assist you in submitting a ""Offer in Compromise"" to reduce your debt to the IRS or state tax authority.
If, however, your debts have exceeded your ability to pay to the point where you are in danger of losing everything, filing for bankruptcy will allow you to preserve your assets and start over with a clean slate. Learn the bankruptcy laws so that you can make intelligent decisions throughout the process. Importantly, you must know which type of relief you seek: one of the bankruptcy law's chapters requires you to liquidate your assets to pay off your debts, while the other allows you to restructure your debts and keep the majority of your main property. A lawyer will assist you in comprehending the nuances and complexities of the bankruptcy laws.
Chapter 7 Bankruptcy Law
Chapter 7 bankruptcy is the remedy of choice for individuals who are hopelessly indebted; bankruptcy laws enable them to declare a new beginning. Often referred to as a """"clean bankruptcy,"""" a Chapter 7 petition authorizes a trustee to sell or liquidate all of your assets. The trustee uses the proceeds from the sales to pay off all of your creditors, and in exchange, your creditors agree to release you from all of your obligations. In most cases, the person who files for bankruptcy has few assets left to lose, allowing for a relatively fast and painless """"do-over.""""
Chapter 13 Bankruptcy Law
In contrast, Chapter 13 requires that you demonstrate a sincere desire to fulfill your obligations and petition the court for additional time. You are behind on payments for your two most valuable assets, your home and your vehicle, but you realize you have the means to make up the difference, and the court grants you an opportunity to do so. ""Under Chapter 13, you may reserve the right to file for Chapter 7 if your debt accumulates faster than your ability to make payments.""
" - https://www.affordablecebu.com/
