When somebody contacts us to discuss the bankruptcy process, one of the first things we do is learn more about their debt. This often times turns up a variety of financial concerns.
Here are five of the most common reasons for filing bankruptcy:
- Job loss. When a person loses their job, they may find it difficult to stay on top of their bills. As a result, they begin to slip behind. Soon enough, creditors are “knocking at their door” despite the fact that they don’t have enough money to make payments.
- Medical bills. Even with health insurance, you never know when a medical emergency could put you in a bad financial position.
- Credit card debt. This may be a problem you caused on your own, but it doesn’t change the fact that you are now in a challenging spot. If you see no possible way of digging out of credit card debt, it may be time to consider bankruptcy.
- Divorce. Going through a divorce is traumatic on many different levels. Not only does this impact your personal life, but it is likely to do the same to your finances. If you are left with debt you cannot afford to pay, bankruptcy after divorce may be the answer.
- Unexpected expenses. You never know when something will pop up that you were not expecting. For example, damage to your home could cause you financial distress. Even if you have home insurance, you may not be covered for everything.
These reasons have led many people to file for bankruptcy. If you find yourself plagued by one or more of these situations, don’t hesitate to learn more about the bankruptcy process and how it can improve your situation.