Top 5 Reasons for Bankruptcy in the U.S.

With increasing financial hardships related to the American economy, there have been a number of individuals filing for bankruptcy. Previously seen as a more drastic measure, bankruptcy has become a much more accepted practice that can prove to be truly beneficial to families throughout the country. According to various studies, there are five common causes that can lead to bankruptcy and they include the following:

Some form of unexpected family loss or natural disaster: Any form of issue that arises suddenly and out of the blue can be great cause for financial trouble. If you lose a family member without warning there are often great expenses that come along with burial procedures and other arrangements. Should a hurricane or tornado strike your house, you may find yourself facing structural damages that make your home unlivable until they are fixed. This can cost thousands of dollars, quickly spiraling your family into great debt.

Divorce: This reason is the cause of 8 percent of bankruptcy cases, a relatively high number if you think about it. When couples seek dissolution of marriage, they must often pay certain legal fees. In addition to that, they are moving from a household income of two to just living off one income in most cases. Often times this can result in serious financial hardship resulting in severe debt.

Over-spending: While sometimes reckless spending can attribute to overwhelming debt, even basic spending on groceries and necessities can result in huge credit card bills. If they are not paid on time then interest stacks on top of the original bill causing an even greater amount of debt. This constitutes 15 percent of bankruptcy filings.

Loss of a job: Accounting for 22 percent of bankruptcy decisions, losing income from a job can greatly increase the chances of debt. If a family is used to living off a set amount of wages only to have that money ripped from them, they can quickly drown in various expenses.

Medical bills: Sadly many individuals who have insurance still find themselves swimming in debt for medical expenses. It is hard to believe that 62 percent of bankruptcy cases are because of health-related issues for individuals and families alike.

If you or a loved one has suffered from any of the above financial issues and have found yourself buried in debt it is important to realize that you have options. Whether bankruptcy is the perfect choice for you or another alternative to bankruptcy would be more profitable in your case, it is essential that you get in touch with an advocate at our firm. Allow our knowledgeable team to guide you with over 33 years of combined legal experience.

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