Chapter 7 Bankruptcy: What Causes People to File

J Thomas Black
Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization

People don't set out in life thinking that they will eventually have to file for bankruptcy. Unfortunately, this is a sad reality many encounter when faced with circumstances that are beyond their control. Do not be ashamed if you come to the realization that you may need to file for Chapter 7 bankruptcy in Texas; this is a big, important step toward a debt-free existence.

Why do people end up needing to file for Chapter 7 bankruptcy? Here are a few common reasons:

  • Piles of Medical Bills. Even if someone has always been pretty good with money management, one huge accident can throw a person into extreme debt. One quarter of the entire population of Texas does not have health insurance. Can you imagine what kind of bills those people would be looking at if they got into a serious car crash?
  • Loss of a Job. Many Americans are lucky if they are living paycheck to paycheck, so when a person unexpectedly loses her job, it's easy to spiral in to debt very quickly. Even if she is able to get unemployment benefits, those checks will not always cover monthly payments on their existing debts.
  • Divorce. Dividing up joint assets can get messy. Many times, people can lose a lot in a divorce. Folks also like to look at Chapter 7 as a way to start over, so they are willing to do it during or after their divorce as a way of wiping the slate clean.
  • To Delay a Foreclosure. Filing for Chapter 7 bankruptcy will temporarily stop foreclosure on a home. The delay will generally only last a few months, but for some people, those few months are just what they need to find a new job or even just borrow the money they require for their mortgage.

As you can see, needing to file for Chapter 7 bankruptcy is something that truly could happen to anyone. It takes just one major life event to throw someone's finances off-track and that could be enough to get him into trouble with debt.

If you are considering filing for Chapter 7 bankruptcy in Houston, contact Attorney J. Thomas Black for your free consultation at 888-707-1233.