Disclaimer: The website may collect compensation for links, mentions and/or videos that are placed in the content.

Disclosure: All content is intended for general information purposes only. We are not professionals in any specialized field. Please consult an expert before making any decisions involving your health, finances, or general well being.

Many individuals and businesses may discover that they need to file for bankruptcy. There are a variety of reasons why someone may realize that filing for bankruptcy would be the preferred course of action. Since there are different types of bankruptcies, it’s important to consult with an attorney to understand which one applies to an individual or business’ situation.

Common Reasons to File for Bankruptcy

Credit card debt may be one of the motivating factors to apply for bankruptcy. Unpaid medical bills are also a contributing factor. In 2013, for example, it was estimated that two million people within the United States had unpaid medical bills which influenced their choice to file.

When businesses experience serious cash-flow and other issues, they may decide that filing for bankruptcy would be beneficial. In some instances, these businesses may plan to continue operations, while in others, they plan to close.

A Brief Overview of 2013 Bankruptcies

During 2013, there was a large number of both Chapter 11 and Chapter 13 bankruptcies filed:

• Chapter 11: 8,980
• Chapter 13: 333,626

The Chapter 7 Bankruptcy Process

Chapter 7 bankruptcies tend to be filed when an individual or family is experiencing serious debt. In this instance, assets are sold in order to pay off as much as the debt as possible. The total time that it takes to complete this process is approximately six months. It’s important to note that after being completed, the bankruptcy will remain on a person’s credit report for ten years.

Schedule a Consultation

If you’re considering filing for bankruptcy, it’s important to schedule a consultation with a bankruptcy attorney. In addition to explaining the legal and financial nuances of these types of cases, your bankruptcy attorney will be able to assist you with the overall process. Once you meet with an attorney at your local bankruptcy law firm, they will be able to recommend the best course of action so that you will be able to find debt relief. It’s important to note that it’s possible to locate a low cost bankruptcy attorney as well. In the state of Texas, for example, it may cost less than $500.00 to file for and proceed with a Chapter 13 case.