Sometimes life can back you into a corner and throw you a financial curve ball that leaves you thinking that bankruptcy is your only way out. An estimated 800,000 Americans file for bankruptcy each year, pointing to a deep running financial problem.
While some people file for bankruptcy due to some unexpected cases, many of these instances involve preventable situation. If you feel that debts are overrunning your life, it’d be wise to consult a chapter 13 bankruptcy attorney in Salt Lake City to help you with the process.
As you go about the process of restructuring your debt, it’s imperative that you ask “how did I get here?”
1. Overreaching with your mortgage
Well, it’s only natural that you’d want to live in a house of your dream. In most cases, this is often a sprawling mansion on the hills with an extensive garden. Unfortunately, such a big, beautiful home cost a fortune, carrying huge monthly mortgage payments.
If your finances are not up to the task, you will run into trouble sooner or later. See, mortgage lenders approve your loan with every confidence that you’re in a position to afford the house. Therefore, they will expect you to make prompt payments each month without fail.
Any deviations from the agreed terms put you on a collision course and could cost you the house. Many people often overlook the actual costs of owning a house including maintenance, repairs, insurance, utilities, and land rates. Before, you know it these costs pile up causing you to fall behind on your payment leading to foreclosure.
2. Going after your dream car
Well, there’s nothing wrong with driving a top of the range car — if you can afford it without breaking a sweat. Unfortunately, the average American forgets that buying a car is also a huge financial decision. As a result, they let their emotions get in the way when buying one.
If you find that you have to spread the car payments for 5 or 6 years to afford it, then you’re way in over your head. That car is too expensive and way above your financial capacity. At some point, you will find yourself owing more money than the car is worth.
When that happens, you will have a hard time selling the car or trading it in if and when you’re unable to keep up with the payments. At this point, the dealer may repossess the vehicle. When that happens, you will be left without a means of transport, which impacts your ability to hold a job and earn an income.
Given that you will still owe money on the car, the situation takes a downturn. Contrary to what many people think, it doesn’t take an extraordinary life event to have you filing for bankruptcy. Sometimes, it only takes one or two bad decisions for you to get sucked into a financial cesspool.
It can be as simple as buying a car or a house that is beyond your financial capabilities that cause your financial ruin. Retaining the services of a reputable expert can help you restructure your debt and start over afresh.
