Mismanagement of Money is Usually not the Reason for Bankruptcy

Receiving a new credit card in the mail—along with realizing you have what could be a large amount of credit at your disposal—can be extremely tempting. We’ve all been there, planning to set aside all credit for emergencies, or only items we can pay off right away. And while most of us do not take off in that spending whirl that would feel oh so good while eating out at some of the new restaurants in town, booking cruises, buying new clothes, purchasing gifts, and so much more, it is still easy to fall into the trap of credit card debt—along with taking on far more than one card over time.

Good money management is key to keeping the household budget in check, and while overspending and chaos with the dollars are certainly reasons that finances can fall into disarray and even cause consumers to file for bankruptcy, medical issues are the number one cause—whether you are filing for Chapter 7 or Chapter 13. These problems may be accompanied by other unexpected events, too, like unemployment, loss of hours at work, separation from a spouse, or a contentious (and expensive) divorce. None of these are conducive to good financial health, and while it may take some time to get back on track with the help of an experienced bankruptcy attorney, financial freedom is within reach!

Student loans may be a serious factor in bankruptcy too—as millions in the US are laden down with large monthly payments, extending to individuals of all ages and not just the 20- to 30-year-old group. Now figuring in as the second largest debt in most households, student loans can either send graduates out into the world to thrive, or to experience crushing stress that may make it difficult to achieve previous optimistic goals.

If you are considering filing for Chapter 7, you can look forward to debts discharged within a mere three to six months, while reorganization of debts in Chapter 13 takes three to five years. In either case, you may be able to keep most or all your assets—such as your home and car—while seeing creditors paid off, and your slate wiped clean.

You probably have many questions about bankruptcy, from wondering how much you will have to sacrifice (very little in most cases), to whether you will have to go to court. Pre-planning may be in order also if you have a tax refund on the way or other assets that must be protected. Speak with a skilled bankruptcy attorney from the offices of H. Lehman Franklin, P.C. Call now to learn more at 912-764-9616, or contact us online.