Some of the reasons for filing bankruptcy:

 

If you have recently lost your job, had a decrease in your normal income due to jobs cutting back on hours, or because of medical issues.

If you recently separated or divorced and your debts are too much for you to handle on your own.

If you have less than $300 per month left after you pay your monthly living obligations (mortgage/rent, auto payment, food, utilities, insurance, and clothing)

If your debts mainly consist of credit cards, medical bills, wage garnishments and repossessions.

If yes is the answer to any of the above questions, Bankruptcy may be a serious consideration for you.

The majority of people who file bankruptcy have had either long term unemployment, major medical problems or is going through a divorce or other life changing events.

Filing bankruptcy is also an emotional decision. Having to dodge phone calls from creditors day in and day out and being afraid to go to the mailbox adds tremendous stress to daily life.

Creditors really don't care about your personal circumstances and the reasons why you're having financial problems. The credit collectors are trained to make your life as uncomfortable as possible in an attempt to get you to pay them. Some even use illegal and harsh tactics to scare you into paying them first before your other creditors.

Many people use their IRA and 401K accounts in an attempt to stay afloat until things get better. Unfortunately, in most cases they don't.

Sadly most people end up in the same position many months later but have lost savings and investments that could have been protected under the exemption laws of chapter 7 bankruptcy.