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Can You Guess The Top Reasons for Personal Bankruptcy?

Rather than feeling shameful over filing for personal bankruptcy, consumers should actually look at it as a pathway to a new beginning. Because statistics tell us that more than 1.5 million people file for personal bankruptcy each year, taking advantage of the opportunity to start anew is hardly uncommon.

What Are The Top Reasons People File for Bankruptcy?

A Huffington Post article listed the top reasons that lead to people filing for personal bankruptcy. We share the top 5 here.  

  1. Medical Expenses A Harvard University study found that 62% of personal bankruptcies in the U.S. are triggered by medical expenses. A startling aspect of that figure is that 72% of those who did file for bankruptcy protection actually had some form of health insurance.
  2. Job Loss and Reduced Income For a while now, many companies have been cutting down on their expenses, leading to job eliminations, pay cuts and reductions in hours. Even a substantial severance pay, savings and other assets can be whittled away fairly quickly.
  3. Credit Card Debt We’ve talked quite a bit here about credit cards, most recently with information about when NOT to use a credit card. Many people who find themselves in trouble with credit card debt are not merely spending irresponsibly. The problem for many is that credit card expenses can easily pile up due to unexpected circumstances like illnesses, disability, etc.
  4. Divorce Even before the attorney fees are factored in, divorce is a costly business. For example, you may be on the hook for a portion of your soon-to-be ex’s debt if the two of you cosigned or opened joint accounts. Divorce or separation also means the loss of income for the household if both partners are working.
  5. Unexpected Expenses A few months back, we shared news from USA Today about how most Americans would find it difficult to cover an unexpected $1,000 bill. From experiencing car trouble to having a tree fall on your roof, those types of expenses can happen in the blink of an eye.

For Workable Debt Relief Results, Call The Oswalt Law Group

Our legal team can help you understand your rights and the options you have when facing overwhelming amounts of debt. To schedule a free consultation, call us at 602-225-2222.

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