What Are the Most Common Reasons for Filing a Chapter 7 Bankruptcy?

Bankruptcy is a legal process that allows a person or business to have their debts discharged when they no longer have the financial means to pay them. Filing for bankruptcy is possible under Chapters 7, 9, 11, 12, 13, and 15 of the Bankruptcy Code. This page explores the top reasons individuals file for bankruptcy under Chapter 7.

If you need help to understand your rights and options under the Bankruptcy Code, contact Loan Lawyers to schedule your free, confidential consultation today. Read on to learn more.

Why File for Chapter 7 Bankruptcy?

If you are considering filing for bankruptcy, you are not alone. Each year, hundreds of thousands of individuals and businesses file for bankruptcy throughout the United States. Chapter 7 bankruptcy allows you to sell off (“liquidate”) your non-exempt assets and use the proceeds to pay off as much of your debt as possible. At the end of the process, the presiding court will discharge any remaining eligible debts, meaning that you no longer need to pay them.

Individuals and businesses file for Chapter 7 bankruptcy instead of pursuing other forms of debt resolution when they fall so far behind on payments that they can no longer keep up with their financial obligations. Chapter 7 allows them to reset their finances from zero after all other options are exhausted. This course of action represents a last resort for individuals struggling to pay off debt.

Common Reasons People File for Chapter 7 Bankruptcy

Multiple factors can come together and leave someone in a precarious enough financial situation that they need to file for bankruptcy. No matter your situation, our legal team is ready to listen to your story and help you explore options. Some of the most common reasons why people file for Chapter 7 bankruptcy include:

• Loss of Income – In general, individuals may fall into debt experiencing a significant reduction in income due to the loss of a job, pay cut, or reduction in work hours.
• Unaffordable Mortgages – The largest source of debt for many individuals and families are loans taken out to purchase a home, known as mortgages. Falling behind on mortgage payments can ultimately lead you down a path toward bankruptcy.
• Credit card debt – People can find themselves with unmanageable debt after racking up significant credit card balances. Bankruptcy can provide a solution when they can no longer afford to make at least minimum payments for an extended period.
• Medical expenses – People who suffer serious injuries or become severely ill may incur significant debt to pay for medical expenses not covered by insurance, including co-pays, co-insurance, deductibles, and non-covered services.
• Divorce or separation – Separating from a significant other in a breakup or divorce can have a serious negative impact on your finances. For example, the need to maintain two separate households is a common source of financial strain after separating from a significant other.

These are just a few of the most common reasons you may find yourself considering Chapter 7 bankruptcy. No matter the circumstances, Loan Lawyers is here to help you evaluate your legal rights and options going forward.

Need Help Filing for Chapter 7 Bankruptcy? Contact Loan Lawyers Today

If you can no longer pay your debts and feel like you have exhausted your options, Chapter 7 bankruptcy may be the best option for you. Contact Loan Lawyers today for a free, confidential consultation to discuss your eligibility. Our legal team can evaluate your situation and work with you to find the best path toward financial health.

The post What Are the Most Common Reasons for Filing a Chapter 7 Bankruptcy? appeared first on Loan Lawyers.

from Loan Lawyers https://www.fight13.com/reasons-to-chapter-7-bankruptcy
via https://www.fight13.com/

How Are Utility Bills Treated in Bankruptcy?

If you’re struggling with unmanageable debts, you might consider filing for bankruptcy. But you may also have questions about the practical effects – particularly when it comes to bankruptcy and utility bills.

So what happens to the utility bill debt you owe? And can utility bills be included in Chapter 7 or Chapter 13 bankruptcies? The answers to those questions depend on several factors, including what chapter you file under.

What Happens to Past-Due Utility Bills in Bankruptcy?

Past-due utility bills are unsecured debts – debts you owe that aren’t tied to collateral. There are no physical items for your creditor to take possession of if you don’t pay these debts. Unsecured debts are the opposite of secured debts, such as mortgages and auto loans backed by collateral like homes and vehicles. If you fail to pay your loans for secured debts, your lender can take away the collateral – for example, by foreclosing on your house or repossessing your car.

Unsecured debts can be discharged under both Chapter 7 and Chapter 13 bankruptcy. However, each chapter’s process – and what that means for the filer – varies considerably.

How Are Utility Bills Treated in Chapter 7?

In a Chapter 7 bankruptcy, your non-exempt possessions are liquidated to pay off your unsecured debts. Creditors of secured debt can also take back the collateral in your possession. Any debt left over – including your utility debt – is discharged, meaning you no longer have to pay it.

However, you must pay your new monthly bills throughout the process to retain service. The utility company can also require you to provide “adequate assurance of payment,” such as prepayment for service or cash deposits.

How Are Utility Bills Treated in Chapter 13?

When you file for Chapter 13 bankruptcy, you create a three- to a five-year repayment plan to pay back some or all of your debts – including unsecured debts like past-due utility bills. During your repayment plan, you must make regular payments to a bankruptcy trustee. The trustee then distributes the money to your creditors, including utility companies. You might not need to repay 100 percent of your past-due utility bills or other unsecured debts during Chapter 13. However, these debts will not be fully discharged unless you complete your court-approved repayment plan.

As with Chapter 7, you will need to pay your current utility bills throughout the bankruptcy process to keep your service.

Can You Still Get Services from Utility Companies that You Owe?

In most cases, you can still receive services from utility companies even if you owe them money – if you can pay your monthly bills after filing for bankruptcy. The utility company is required to treat you as though you are a new customer. They also can’t try to collect past debts while you are in bankruptcy.

Contact an Experienced Bankruptcy Lawyer in Fort Lauderdale Today

Are you interested in making a fresh financial start through bankruptcy? If so, the Fort Lauderdale bankruptcy lawyers at Loan Lawyers are ready to provide the support and guidance you need. Contact us now to discuss the specifics of your situation in a free case review.

The post How Are Utility Bills Treated in Bankruptcy? appeared first on Loan Lawyers.

from Loan Lawyers https://www.fight13.com/utility-bills-in-bankruptcy
via https://www.fight13.com/