Why people file bankruptcy depends on some of the following factors:
More is owed than the assets and income can support.
There are a large number of creditors, which makes it too difficult to attempt an informal proposal.
The debtor is having his or her salary garnisheed or attached by one or more creditors, is being harassed by creditors, or is being constantly examined or having other proceedings taken against him or her.
The debt cannot be paid off in any reasonable time.
Note that deceased persons and minors can also have themselves assigned into bankruptcy.
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