There are many different reason people file for bankruptcy but here I have the top 5 reasons people file for bankruptcy.

1. Stop foreclosure on your home so that you can catch up on your missed mortgage payments.

By filing bankruptcy you won’t eliminate your mortgage on your property. What will happen is you will structure a plan so that you can repay the amount that you are behind on your mortgage.

2. Reduce Medical Bills

It’s possible that an accident or major illness can completely run you out of money. Medical costs these day are really expensive and it doesn’t take much to add up to $100,000 or more. Many times people that run into this situation have to make a choice to determine what bills are going to get paid and what bills are not possible to be paid. Filing for Chapter 7 bankruptcy can reduce your medical bills or possibly even eliminate them

3. Loss Of Job

This is one of the most common reasons for people to file for bankruptcy. If a family goes from depending on two salaries every month and all of a sudden that is reduced to one then financial trouble is almost certain. Filing for bankruptcy may be one of your only options.

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After going through all the trials and tribulations of bankruptcy, a discharge is the ultimate reward for any individual. Once you get a discharge, it means that you are not apt to the creditors and are no longer required to make any repayments for a period of one year. If there are no objections raised by the creditors in regards to your discharge, a discharge of your debts will be granted. This means that you have no further obligation to repay the debt that you owed. The court grants you a new lease to your financial status. Unfortunately though, a discharge is not automatic, and may be postponed by the court. You are not completely free from all debts.

Depending on the chapter that you file under, the timing differs. For example if you file under Chapter 7, the discharge is granted about four months after the date the debtor files the petition. Under chapter 11(restructuring, the discharge occurs on confirmation of the chapter 11 plan). After chapter 12(adjustments of debts of family members) and 13(for regular income earners), the discharge is granted after all repayments are made under the plan.

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