These Are the Top Three Reasons Why People End Up Going Bankrupt

Posted on : March 5, 2018
bankruptcy for debt relief

There has been a social stigma associated with filing for bankruptcy for many years, but it turns out that a lot of the reasons people ultimately end up moving forward with their bankruptcy petition for Chapter 7 or Chapter 13 seem unavoidable. It’s hard to find the right support to get you through this difficult time emotionally and financially, but bankruptcy may be the fresh start you need to get your life back on track.

The leading three reasons for a person to file for bankruptcy, as according to bankruptcy court statistics, are medical expenses, reduced income and a job loss. A person who finds themselves in an overwhelming and confusing financial situation quickly, if any of these sudden issues hits them. One Harvard University study found that approximately 62% of personal bankruptcies in the United States were triggered by unexpected medical expenses.

The study also found that the vast majority of those people who ultimately filed for bankruptcy as a result of medical expenses had some form of health insurance. As many companies are looking for ways to cut their expenses, job loss and reduced income are increasing possibilities. Job loss can deplete someone’s savings and assets quickly as well as additional healthcare expenses.

Reduced income, such as a reduction in bonuses or major pay cuts can lead to someone finding themselves in over their head with debts they had already taken out. Other common causes of bankruptcy across the United States included a divorce, credit card debt, unexpected expenses, utility payments, student loans foreclosure and overspending. If you find yourself in need of support from an experienced bankruptcy lawyer, you need to schedule a consultation with an attorney as soon as possible. An attorney can help you figure out whether or not you are eligible for chapter 7 bankruptcy and how you should proceed if you need to file for bankruptcy as soon as possible.

 

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