When in severe financial debt, most legal systems have a provision in place whereby an individual can seek relief. As a last resort, such persons can declare personal bankruptcy. This is a court-imposed status when it is a clear indication that someone is unable to repay debtors and or creditors. Financial debt can happen to anyone quickly and there are a number of factors that can contribute to a person becoming bankrupt.
Below is a list of the 3 most common reasons for bankruptcy and can happen to anyone.
Medical bills, unemployment, and credit card debt are three main reasons that can lead to bankruptcy.
Medical Bills As an adult, especially for those who have a family, health insurance is a necessity. Even with this provision in place, a number of persons continue to struggle when it comes to paying their medical bills. Studies have shown that over the years an increasing number of bankruptcy filings have occurred due to a medical emergency that unexpectedly pushed some into a state of personal debt. Statistics show for persons under the age of 65 an alarming 20%, insured or not, will incur medical debt and out of that number at least 60% will file for bankruptcy. This number continues to climb annually.
Unemployment Due to changes in the economy the cost of living continues to rise. Bills continue to increase and opportunities for work continue to decrease. Companies and small business owners have not been exempt from this changing tide. Many businesses have been forced to close their doors and as a result, a great number of persons have lost their jobs due to cuts and layoffs. This has plunged many into a state of personal bankruptcy. Downsizing and pay cuts are also a factor.
Credit Card Debt Credit card debt may seem like a luxury of the spendthrift but with the increase of natural disasters many have utilized this avenue to get their lives back on track and as a result have ranked up a massive amount of credit debt. Credit cards are often used in times of emergency for big ticket items or financial emergencies. Although they can be a quick fix, keeping up on the payments can become a burden, especially if you are not used to making them or adjusting your lifestyle and budget.
Personal bankruptcy is not the end but rather a beginning. It is a clean slate and an opportunity to recover financially. The filing will remain on your credit report for quite some time but with the right action plan and measures put in place it is possible to recover and flourish after enduring a state of bankruptcy.
The bankruptcy attorneys at Border Law Southfield MI can help. With over 15 years’ experience in all debt relief matters, our knowledge and expertise can alleviate the stress individuals face when filing for personal bankruptcy. As a full-service Bankruptcy Firm, we specialize in Chapter 7, Chapter 11, and Chapter 13. We can help you pave the way for a brighter, secure financial future. Call us today for a Free Case Evaluation!