Most people have a mortgage, credit card, student loan or other debt obligation to fulfill each month. However, unexpected financial hardship can make paying these debts difficult or impossible. These situations often lead to other serious financial problems. For example, a person paying child support may be unable to make payments on his or her vehicle. Creditors collecting past due medical bills may seek a judgment to garnish wages. Fortunately, bankruptcy may be able to help with the following:
- Medical bills: Lack of coverage for illnesses and out-of-network care may cause people to incur thousands of dollars in medical bills. Excessive hospital bills can go into default and cause other financial problems.
- Divorce: Child support payments, alimony, legal fees and division of marital assets cause financial hardship for many people filing for divorce.
- Job loss or reduced income: In most cases, job loss comes with little to no warning. People who lack adequate savings may find they are unable to pay their mortgages and other debt obligations. A reduction in income can cause these same problems.
- Excessive consumer debts: Credit card bills, mortgages, car loans and other types of consumer debts may cause financial problems. If one of these debt obligations falls into delinquency or defaults, the others may follow course.
Filing for bankruptcy may help people in several different ways. For example, an automatic stay can temporarily halt wage garnishments and foreclosure. Discharging cumbersome debts may help pay for other obligations, such as past due taxes or child support. A Chapter 13 bankruptcy repayment plan can help people restructure debts while being given the chance to keep their most important assets.
The Kansas City bankruptcy attorneys at The Sader Law Firm can help people struggling with their finances find options for debt relief.