Going through a financial disaster is a confusing and intimidating time. As you struggle to keep yourself afloat, you may think about declaring personal bankruptcy. One helpful thing to keep in mind is that you are not alone in your financial turmoil. Filing for bankruptcy is nothing to feel shame about.
Millions of people file for bankruptcy for numerous reasons. These are a few of the most common factors that cause individuals to declare consumer bankruptcy.
Health care costs
When someone encounters health problems, it often results in financial trouble too. In fact, 66.5% of bankruptcies involve medical issues. Having to miss work and dealing with high health care expenses can easily result in financial downfall.
Divorce or separation
Marriage provides many people with both emotional and financial stability. When a relationship ends, however, it can take a toll on both. Property division, legal costs, support payments and an increase in living expenses can all contribute to money problems.
Getting an education can be expensive. Many people get stuck paying off loans for years. Sometimes, these loans are completely unaffordable and play a major role in bankruptcies.
It is difficult to manage money. Some people make unwise decisions with cash or credit. Spending beyond one’s means and failing to budget can quickly lead to debt and bankruptcy.
Losing a job
Job terminations and layoffs can send people into financial devastation. Even in situations when there is severance pay, a lack of job security can deplete savings.
Giving or lending money
Being generous and charitable are often good characteristics. However, too much generosity can end in financial uncertainty for some. When someone is too giving to the extent of ignoring personal financial stability, it may lead to going bankrupt.
Usually, multiple factors contribute to bankruptcy decisions. No matter how you ended up at this point, bankruptcy may be the process you need to start over.