Reasons People File For Bankruptcy, Parts 1 & 2
Most people believe that individuals file for bankruptcy because they run up their credit cards and are not responsible enough to repay their debts. This common misconception is prevalent in our society. When we are about to sit down with a person during the free consultation that we offer, countless times the person will say, “I can not believe I am sitting in a bankruptcy attorney’s office.” Let’s take a look at the real reasons people file for bankruptcy:
- Medical Bills
- Job Loss
- Divorce and Separation
- Loss of Income
- Student Loans
- Housing Market/Foreclosures
- Helping Family
- Credit Card Use
In this blog, we will look at the first two reasons mentioned above:
In today’s climate, it does not take much to rack-up significant medical expenses. A one night stay in the hospital can cost tens of thousands of dollars. Whether you have health insurance or not, uncovered medical and dental bills are difficult to pay. Most people do not have the cash on hand to pay these bills and end up using credit cards to make a payment, even if a payment is made.
It does not take long to deplete savings and other assets if you are not working or had a recent job loss. Most families do not have the recommended three to six month emergency fund to pay living expenses. Moreover, additional expenses may result from a job loss. For example, you may need to pay your own health insurance or you may incur job hunting costs.
In a perfect world, everyone would pay their debts on a timely basis. However, a perfect world is not the real world. In the real world, you have to deal with medical problems, job loss, foreclosures, disabilities, divorce and student loans. These things happen, are unexpected and are not your fault. If you are drowning in debt, there is hope and help. Just ask for it. Give us a call to take advantage of our free consultation so we can discuss your situation and offer you some solutions.