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  • Louisa P.starstarstarstarstar5.0
    Robert and the team at Stiberman Law are truly exceptional. I was faced with the daunting task of navigating bankruptcy, and from the moment I contacted them, I knew I was in good hands Read More
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  • Arlene S.starstarstarstarstar5.0
    Excellent Lawyer, friendly and on top of things and reliable and efficient. I had to go through bankruptcy twice and I trusted them every time. I had the best experience with Robert and Read More
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    I am very satisfied with the service that they offered us. They were very professional and kept us informed at all times. I was looking for a bankruptcy attorney nearby and fount Robert Read More
    March 19, 2024logo
  • Louisa P.starstarstarstarstar5.0
    Robert and the team at Stiberman Law are truly exceptional. I was faced with the daunting task of navigating bankruptcy, and from the moment I contacted them, I knew I was in good hands Read More
    May 21, 2024logo
  • Arlene S.starstarstarstarstar5.0
    Excellent Lawyer, friendly and on top of things and reliable and efficient. I had to go through bankruptcy twice and I trusted them every time. I had the best experience with Robert and Read More
    March 20, 2024logo
  • Gustavo S.starstarstarstarstar5.0
    I am very satisfied with the service that they offered us. They were very professional and kept us informed at all times. I was looking for a bankruptcy attorney nearby and fount Robert Read More
    March 19, 2024logo
  • Paul B.starstarstarstarstar5.0
    I would like to share the amazing experience I have had with this Law firm. I was on the verge of loosing my house because I had not paid my property taxes. I looked for a Bankruptcy at Read More
    July 10, 2023logo
  • S.M.starstarstarstarstar5.0
    When I say this office was absolutely the best, I am not kidding! They have been absolutely phenomenal. Robert has been the best bankruptcy attorney. The whole team has always kept Read More
    April 20, 2023logo
  • Paula D.starstarstarstarstar5.0
    I was referred by a friend to this bankruptcy attorney. Mr. Stiberman and his staff was very courteous, knowledgeable and very caring towards my concerns. I am pleased with the outcom Read More
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  • R.P.starstarstarstarstar5.0
    The process was relatively easy, I would recommend Stiberman Law to anyone who finds themselves in need of a bankruptcy attorney.
    February 24, 2023logo
  • Jose N.starstarstarstarstar5.0
    I have to say that I have had a great experience with Stiberman Law regarding a bankruptcy and they have been very informative and supportive. They have been very helpful and always ans Read More
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  • L.L.starstarstarstarstar5.0
    Excellent service. Great bankruptcy attorney and staff. Always informed me of what to expect. My Chapter 13 bankruptcy was smooth and the process was easy thanks to Robert and the Read More
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  • Sam Sstarstarstarstarstar5.0
    Twelve years ago I was in need of legal representation stemming from the housing meltdown if 2008. Robert Stiberman and his staff handled the matter with complete professionalism and sp Read More
    October 19, 2022logo
  • K.D.starstarstarstarstar5.0
    I was looking for a bankruptcy attorney in Miami, and I found Mr. Stiberman. He and his office were efficient, and they guided me through every step of the process. I am appreciative of Read More
    September 16, 2022logo
  • Carmen C.starstarstarstarstar5.0
    I am so grateful for Stiberman Law, P.A. In 2019 my husband and were faced with a very difficult decision file for Bankruptcy, unfortunately we weren’t able to pay for our credit Read More
    October 26, 2022logo
  • N.M.starstarstarstarstar5.0
    Excellent work from this bankruptcy law firm! I was drowning in debt with my license suspended from a lawsuit I had and thought I would have to spend the rest of my life paying back deb Read More
    August 17, 2022logo
  • R.Z.starstarstarstarstar5.0
    The experience with this office has been great. No problems at all they have kept me straight to doing the right thing and feeling a breeze of peace and being debt free with my bankruptcy.
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  • F.starstarstarstarstar5.0
    Very happy with Robert and his team. Thanks to them we were able to save our home. Very helpful and knowledgeable in bankruptcy. Best attorney.
    July 28, 2022logo
  • E.R.starstarstarstarstar5.0
    I had a great experience, I just want thank Stiberman law and his team for a great experience also Ana for the help and explaining my case. Appreciate, thank you
    July 25, 2022logo
  • A.B.starstarstarstarstar5.0
    Very good office with my bankruptcy. They have been amazing through this hard process. Very happy with Robert and his staff they are very nice and professional. Thank you stiberman!
    July 23, 2022logo
  • W.J.starstarstarstarstar5.0
    Amazing work by Robert. They are really good with what they do, very attentive and knowledgeable. Customer service and professionalism are top, the lawyer has been great this whole t Read More
    June 25, 2022logo

Why Do People File for Bankruptcy? Common Reasons and How It Can Help

Financial difficulties can hit people for a variety of reasons. When bills start to pile up and people are having trouble paying them, they may think about filing for bankruptcy. If you find yourself in this category, you’re not alone. Statistics show that consumer bankruptcies totaled 372,240 in 2022.

As we examine why people file for bankruptcy, you’ll see some common situations that have left people looking to change their financial situation.

Reasons Why People File for Bankruptcies

In many cases, people look for other solutions to their money problems before deciding to file for bankruptcy. But bankruptcy is sometimes the best and only way out when faced with one of the following situations.

Overwhelming Medical Expenses

Medical bills are one of the most common reasons people file for bankruptcy. The rising cost of healthcare can lead to unforeseen financial situations. An unexpected illness can also result in a mountain of medical bills. This type of debt can be included in a bankruptcy case. Filing for bankruptcy can help discharge or restructure medical debts, giving people a fresh start and the ability to focus on their health.

Unemployment or Income Reduction

This is the most common reason why people file for bankruptcy. Statistics have shown that 40% of all bankruptcy filers cite losing their job as the reason for deciding to file. Filing for bankruptcy can provide relief from debt collectors and may allow people to discharge certain debts, such as credit card debt. Chapter 7 is typically the most popular form of bankruptcy because most debts can be discharged allowing people to have a fresh start.

Although people may have emergency funds for situations like unemployment many times that’s not enough to cover a long-term situation. After exhausting those funds and other resources, bankruptcy is often the only choice left.

Credit Card Debt

High-interest credit card debt can quickly accumulate, especially if the borrower is only able to make minimum payments. Filing for bankruptcy can help discharge credit card debt and may allow people to restructure other debts, such as mortgages or car loans.

Foreclosure or Repossession

Falling behind on mortgage or car payments can lead to foreclosure or repossession. Filing for bankruptcy can provide an automatic stay, which temporarily halts collection efforts and gives people time to catch up on missed payments or restructure their debts. In some cases, Chapter 13 bankruptcy can allow the homeowner to get current on their mortgage payments and possibly modify the loan to better terms through the bankruptcy Mortgage Modification Mediation (MMM) Program.

Addiction

Addictions to drugs, alcohol, or gambling can lead to many different problems, including financial ones. When this is the case, some may look to bankruptcy as a way to cope. When this is the case, it’s also important to seek treatment for the addiction so that all issues can be resolved.

Divorce

Going through a divorce can leave many people in financial ruin. Whether it’s a result of mounting attorney fees or adjusting to only living on one income, divorce can lead some people to file for bankruptcy.

In some cases where joint accounts and debts were present, one party may stop paying the debt. This leaves the other person liable. This type of debt can become overwhelming. Unless you have removed your name from the debt, creditors can come after you for payment if your ex has become delinquent with payments. Filing for bankruptcy can help discharge or restructure debts related to the divorce, giving people a fresh start.

Wage Garnishment

When a creditor obtains a court order to garnish your wages, a portion of your paycheck is automatically deducted to pay off your debts. Filing for bankruptcy can stop wage garnishment and may allow people to discharge the underlying debt.

Civil Lawsuits

If you are sued and a judgment is entered against you, you may be required to pay a significant amount of money. Filing for bankruptcy can discharge the underlying debt, preventing the creditor from collecting on the judgment.

Driver’s License Suspension

In some states, unpaid traffic fines or other debts can result in the suspension of your driver’s license. Filing for bankruptcy can help discharge these debts and may allow people to reinstate their driver’s license.

Reduce Interest Rate on Car Payments

If you are struggling to make your car payments, you may be able to use bankruptcy to reduce the interest rate on your car loan. In a Chapter 13 bankruptcy, you can often “cram down” the value of your car to its fair market value, which can reduce the amount of the loan and the interest rate.

Avoid HOA Foreclosure

If you fall behind on your homeowners’ association (HOA) fees, the HOA may initiate foreclosure proceedings on your home. Filing for bankruptcy can stop the foreclosure process and give you time to catch up on your payments. Additionally, if your home is underwater (meaning you owe more on your mortgage than the home is worth), you may be able to use bankruptcy to discharge the unsecured portion of your HOA fees.

Seeking Professional Advice and Exploring Your Options

As always, it’s important to seek professional advice and explore all options before making a decision to file for bankruptcy. Bankruptcy is a serious decision that can have long-term consequences, so it’s important to understand your options and make an informed decision. A qualified bankruptcy attorney can help you explore your options and determine whether bankruptcy is the best course of action for your specific circumstances.

Do You Have Questions About Bankruptcy?

If you are considering filing for bankruptcy and have questions, the team at Stiberman Law can help. We have 13 years of experience in bankruptcy law and can answer your questions and guide you. Call us today at (954) 922-2283 or fill out the form below to schedule a free consultation with a Florida bankruptcy attorney.

Written By:

Attorney Robert Stiberman

Robert is an experienced bankruptcy attorney adept at handling Chapter 7, 13, and 11 filings, with more than 15 years of experience in bankruptcy cases. Robert represents clients in both consumer and business bankruptcy ... Read More

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