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People file bankruptcy for many unique reasons. Very few people file bankruptcy when they can pay their bills. The bankruptcy changes made in 2005 prevent this from occurring. Here are the top 5 reasons people actually file bankruptcy:

Medical Bills
An accident or medical illness can impact family finances quickly. Lack of insurance increases this risk. Missing work due to illness can impact family finances even further. Which takes us to the next common reason people file bankruptcy.

Job Loss
Job loss and layoffs can place people in a financial disaster quickly, particularly if they were living paycheck to paycheck while employed. Unemployment is usually just a fraction of previous income levels, and only lasts so long.

Stop Foreclosure
A chapter 13 bankruptcy can create a payment plan to catch up on late mortgage payments and stop foreclosure. Past mortgage payments and legal fees can be included, permitting filers to keep their home and create a workable payment plan.

Stop Wage Garnishments and Repossessions
Filing a chapter 7 bankruptcy can stop wage garnishments immediately. Any property you have that is in danger of repossession, by creating a payment plan in a chapter 13, you can stop the repossession.

Stop Creditor Harassment
Creditors can no longer contact you once you have file bankruptcy papers. You will no longer receive phone calls or mailings, giving you a chance to breathe.

Unlike in the past, there is no stigma attached with filing bankruptcy. And with unemployment rates at over 10%, more people will be taking advantage of the relief bankruptcy allows.

Guest Article Provided By: BankruptcyFormProcessing.com where you can find more information on filing bankruptcy and DoItYourSelfBankruptcyForms.com where you can find free bankruptcy forms.

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