Bankruptcy Comes for All Kinds of People for All Kinds of Reasons

People file for bankruptcy for all kinds of reasons. If you’ve been considering it, chances are you, like millions of Americans, have been stressed about debt and see no other way out from under it. In fact, in the last year filings for bankruptcies have increased by 16 percent, with nearly half a million people and over 20,000 businesses filing in the last 12 months. What’s behind the rise?

Why People File for Bankruptcy 

Ordinary people across the country experience job loss, divorce, catastrophic medical bills, or other unexpected financial disasters that lead to bankruptcy. Some people struggle to manage credit card debt, and other bills that have piled up.  Even famous people find themselves facing bankruptcy for a variety of reasons:

• Boxer Mike Tyson lived a lavish lifestyle that put him over $31 million in debt;
• Football player Warren Sapp got behind in child support, alimony, and tax debts to the tune of over $1.5 million;
• Basketball player Antoine Walker found himself with over $1 million in gambling debts;
• Football player Michael Vick wound up losing endorsements and his career after getting mixed up in illegal dog-fighting, and accumulated over $20 million in debt;
• InfoWars founder Alex Jones lost a defamation lawsuit and was on the hook for $1.5 billion;
• Former NY governor and attorney Rudy Giuliani lost a lawsuit and was ordered to pay out $148 million in damages.

What Happens When Bankruptcy is Filed? 

A bankruptcy filing freezes attempts for creditors and others to collect monies that are owed, giving the person who filed a bit of breathing room while working with a trustee to figure out how to get creditors as much as possible while giving debtors a chance to start over financially. Depending on the type of bankruptcy, debtors may be given an opportunity to repay a portion of what is owed through a strict repayment plan, while simultaneously having portions of the debt wiped clean through a discharge.

A Consequential Decision 

Filing for bankruptcy is not to be taken lightly. Although it’s definitely to debtors who have no other way out of debt, there are some long-term consequences:

• Some assets may be repossessed or sold in order to pay off creditors;
• A credit score that is likely already tanking will drop even further, and the bankruptcy will stay on your report for 7-10 years;
• Anyone who co-signed on your loans will be stuck with the bill.

Is Bankruptcy for You? 

Whether you’re famous or not, the pressures of financial obligations can be overwhelming for an array or reasons.  The experienced Miami bankruptcy attorneys at The Law Office of Julia Kefalinos can help. Schedule a confidential consultation in our Miami office to discuss your situation today.

Source:

uscourts.gov/news/2024/04/25/bankruptcies-rise-16-percent-over-previous-year#:~:text=Bankruptcy%20filings%20rose%2016%20percent,(COVID%2D19)%20pandemic