There are a plethora of ways to why some people file for bankruptcy and why some people fall into debt. If you are curious as to why people and businesses file for bankruptcy, then we have taken the liberty to compile a list of ten reasons why companies file for bankruptcy.
If you are a small business or just a business looking to learn how you can get out of your financial situation then here at our bankruptcy Hamilton office, we will be able to help answer any questions you may have.
The Top 10 Reasons Companies File For Bankruptcy
# 1 – Financial Mismanagement
Credit is something that everyone has and with credit cards being tossed out to so many people – even those with bad credit – it allows for many to sink into debt.
# 2 – Recent Job Loss
This is a kicker and something that far too many people deal with. Losing a job can be devastating, and it can be trying – especially when you have family and mortgage to worry about.
# 3 – End Wage Garnishment
Individuals who fail to pay off their debt usually have their wages and income garnished to pay this off. This can be a horrible thing for the person who stars to see less and less of their money come to them.
# 4 – Stop Being Harassed by Creditors
Creditors can be like flies – annoying you and buzzing your ear with their messages. But hey if you didn’t want this, you should have paid off your debt. They are quite persistent.
# 5 – Elimination of Medical Debt
This is an unfortunate but all true reality. Medical bills are not cheap, and most often when families can’t pay the bill but need the operation, they will opt out for bankruptcy.
# 6 – Stopping/ or Preventing a Car from Being Repossessed
A bit similar to our last entry when people cannot pay off their car note but still require their vehicle they will file for bankruptcy.
# 7 – Stopping/ or Preventing a Home Foreclosure
This is perhaps one of the most common reasons for the working man – trying to prevent a home foreclosure.
# 8 – Reorganization of Debt
You don’t always have to file for liquidation of your debt, but you can reorganize and restructure the debt you have.
# 9 – Prevent Utilities From Being Turned Off
Failing to pay your utility bills will have the utility companies shutting off your utilities, and they are ruthless and merciless when it comes to this.
# 10 – Exposing of a Fraudulent Creditor
Lastly, if a creditor – out of the blue – says you owe them money a bankruptcy can ask for them to show proof.