Are you finding yourself drowning in loads of debt and are unsure of how you will financially recover? Debt can quickly become overwhelming and as the number continues to add up, you may not know how you will ever pay it back. Filing for bankruptcy is typically a last resort for overcoming debt issues, but for some, it may be their only option. The term bankruptcy holds a certain amount of dramatic weight, and you may be wondering if you have really made it to that point. If you are thinking about taking this major financial step, consider the following information before contacting a reputable bankruptcy attorney.
Common Reasons for Filing for Bankruptcy
Although everyone’s circumstances differ, there are a few common life experiences that can spur the need to file for bankruptcy, such as the following events:
Recent job loss: This has become especially prevalent in the past six months, as COVID-19 impacted the U.S. economy. Many Americans have accumulated significant debt and are filing for bankruptcy.
Medical expenses: Even those who have health insurance can face large debts from medical bills. Whether you were in an accident or have a chronic illness, these medical debts are often unavoidable.
Filing for divorce: It is no secret that divorce can be a pricey endeavor. Depending on the length of your divorce proceedings, the legal fees can quickly rack up. In addition, going from two incomes to one or none can be quite an adjustment.
Credit card debt: Those who rely on credit cards for most of their purchases can find themselves in hot water. When car payments, home renovations, vacations, and other large purchases continue to be unpaid, creditors can sue you for your lack of payments.
You are facing foreclosure: Buying and owning a home is a significant expense and it can be difficult to make your mortgage payments on time each month. If your unpaid bills begin to stack up, you could face foreclosure and need bankruptcy to help you get by.
Do I Qualify for Bankruptcy?
Before you can make any decisions about filing for bankruptcy, you should be sure that you actually qualify to do so. There are two common ways in which you can file for bankruptcy, Chapter 7 and Chapter 13, and both have specific qualifications. Chapter 7 bankruptcy is meant for those who have an extremely low income or no steady income at all. This form of bankruptcy is an option for those who truly cannot pay their bills month to month.
If your income is above your state’s median household income, you do not qualify for this type of bankruptcy. In New York, the median household income is $60,762. Chapter 13 bankruptcy allows filers to set up a payment plan to pay off their debts — the debts do not simply disappear after filing. If you have a secure income but need more time to pay your debts, Chapter 13 bankruptcy will help you stretch your debt payment deadline to a three- to five-year period.
Contact a Rockland County Bankruptcy Lawyer
The best way to determine if bankruptcy is right for you is by speaking with a licensed professional. Even if your circumstances differ from those explained above, bankruptcy may still be a valid option. The Law Offices of Robert S. Lewis, P.C. is dedicated to helping New Yorkers overcome their financial burdens. Our reputable attorney offers free consultations to allow those considering bankruptcy to get a professional’s opinion. If you have significant debt and you think filing for bankruptcy may be beneficial, contact our Hudson Valley Area bankruptcy attorney at 845-358-7100 today to schedule your appointment.