Most Tucson & Arizona Bankruptcy Cases are Caused by these Six Situations

 

Most Tucson & Arizona bankruptcy cases are the result of honest, hard-working people and families who just aren’t able to stay ahead of their debts. In some cases, the person has tried to make payments for years, but has fallen short and now they need to stop wage garnishment or some other form of judgement collection by a creditor. Others have suddenly lost income or incurred sudden expenses, like medical bills or a divorce, and Chapter 7 bankruptcy is their only hope. For most people in these circumstances, Chapter 7 bankruptcy is the right answer. However, a few will benefit more from Chapter 13 bankruptcy or maybe even just debt counseling. A rare few may have to file Chapter 11 bankruptcy, though this is generally reserved for businesses.

 

6 Most Common Causes of Tucson & Arizona Bankruptcy Cases

 

Unemployment and Under-employment:
Even people who have been successful at paying their bills for years can suddenly find their debts are unmanageable when they lose their job. Whether they can’t find work at all or can’t find a job that pays well enough, the debts become monstrous as late charges, over limit fees, and penalizing interest rates stack up.

 

Divorce and Separation:
Divorce and Chapter 7 bankruptcy seem to go hand-in-hand. In a divorce or separation, a couple whose income successfully supported a single household must now support TWO households. These struggling couples now face an impossible financial situation when there isn’t enough income to cover separate living expenses and minimum payments on their loans and credit cards.

 

Medical Bills:
Medical bills are frequently a problem for people in Tucson & Arizona. Bankruptcy can help them eliminate these and other debts at a time when their income has sharply fallen because of their medical problems. Even if you have good health care coverage, co-pays for hospital stays, surgical procedures, and other major medical events can leave you with devastating medical debts totaling tens of thousands of dollars.

 

Small Business:
Half of small businesses close within five years, often leaving owners of these businesses with commercial leases and other debts. Optimistic small business owners entered into these debts fully believing the business would pay the loans. But when the business closes they can’t handle the payments without the business income. When creditors can’t collect from the business they go after the business owners. Business debts can quickly overwhelm former business owners when creditors begin judgement & collection efforts.

 

Co-Signed Debts:
Often, people who co-sign on loans to help a friend or family member don’t know there’s a problem until years later. But suddenly debt collectors are hounding them because the primary borrower couldn’t pay the loan. When this happens, co-signers are stuck with the whole loan balance plus the all collection costs and interest. Co-signers on an unpaid debt will be pursued as if it was their debt. Collectors use whatever means legally available to collect these loans. You might need to stop wage garnishment, bank account garnishment, liens on your home, or other severe collection methods.

 

Real Estate:
More recently, in Tucson & Arizona, bankruptcy is increasingly the result of the Real Estate meltdown. The recent collapse in real estate prices has left 15.2 million U.S. mortgages upside down, which means the value of these homes is less than what the owners owe on them. In Tucson, it is reported that over 40% of all single family homes are underwater. If you can’t afford the mortgage payment, you can’t sell your home without bank approval. If you are allowed to sell your house for less than you owe, you can still owe the difference between the loan balance and the sale price. This mortgage deficiency often creates a catastrophic debt requiring bankruptcy protection.

 

If you face these or other serious debt problems, you should talk with a Tucson, Arizona bankruptcy lawyer as soon as possible to make sure you know your rights and options. It costs you nothing to speak with Tucson & Arizona bankruptcy lawyer Jeffrey P. Judge.

 

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