What is one reason why individuals might file for bankruptcy?

Individuals often file for bankruptcy primarily due to an inability to repay outstanding debts. Bankruptcy acts as a legal tool that allows individuals to either discharge their debts or create a manageable repayment plan under the supervision of the court. This process provides relief from the stress of financial burden and can offer a fresh start. When someone finds themselves overwhelmed by loans, medical bills, or other financial obligations that they cannot meet, bankruptcy can help relieve that pressure, halt collection actions, and potentially protect them from losing essential assets.

The other options represent scenarios that are not applicable to the purpose of filing for bankruptcy. Seeking a government grant for financial relief does not align with the bankruptcy process, which is meant for dealing with debts rather than obtaining new funding. Similarly, acquiring new credit lines is typically not the objective of filing for bankruptcy, as bankruptcy can negatively impact one’s credit score and ability to secure new credit for several years. Lastly, restructuring profitable investments is more about improving existing financial strategies rather than a response to unmanageable debt, which is the central reason for opting for bankruptcy.