Bankruptcy is a sensitive topic and it is a subject area that is filled with stigma and misconceptions. One common misconception is that bankruptcy is always the result of reckless spending. While reckless spending can be a cause, this is not usually the driving factor.
What are some of the most common reasons for bankruptcy?
Medical expenses
The U.S. health system operates on an insurance basis. Most insurance policies include quite strict conditions, and if a person does not meet the criteria described in the policy or the fine print, they could be left significantly out of pocket. When faced with the choice of not having an urgent medical procedure or finding a way to pay for it, an individual cannot be blamed for taking the latter route. The downside of this is that they can end up in a significant amount of debt.
Bankruptcy is often the only viable option left for those with mounting medical bills and no way to pay them.
Unexpected job loss
The employment market in the U.S. can be erratic at times. Many businesses are struggling, and this has a knock-on effect on employees. A business that is struggling may have no option but to lay off workers. Not only does this leave workers out of pocket, but it may invalidate the worker’s health insurance and other work-related benefits. When an individual has worked hard every day, they cannot be blamed for losing their job unexpectedly and potentially facing bankruptcy.
If you’re struggling financially, know that you are not alone. Taking the proactive step of seeking legal guidance is a good place to start rebuilding your financial stability.
