Debts That Lead To Bankruptcy

: Chris Lee Law Firm

  Filed under: Debt

debtDebt is a common occurrence among most Americans. In today’s economy, our personal debt burden is growing at a much faster rate than in years past. As we grow closer to unmanageable debt burdens, many fiscally responsible families are finding themselves in need of bankruptcy protection more than ever before.

Slippery Slope

One of the main sources of debt that contributes to Dallas bankruptcy filings is medical debt. With health insurance options becoming more expensive, many families cannot afford adequate health insurance. Even a minor medical emergency can leave you with thousands of dollars in medical debt. Luckily, this is also one of the easiest types of debt to be discharged in bankruptcy.

Credit card debt has grabbed a hold of many of us, leaving us further in the hole than we ever planned. When times get tough, many reach for the credit card to cover essential living expenses like food and gas. Credit card debt is also easily discharged in either Chapter 7 or Chapter 13 bankruptcy, depending on your needs. However, credit card and medical debts can both be negotiated directly without the need for bankruptcy in many cases.

While student loan and tax debts are not always eligible for discharge in bankruptcy, these debts do push many into bankruptcy indirectly. When keeping up with student loan or tax debt payments becomes overwhelming, we are more likely to default on other payments like credit cards. These two difficult debts can be tricky and are generally best managed by direct negotiations with the lender or IRS.

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