If you have found yourself overwhelmed with debt, you are not alone. On average, more than a million people across the country have filed for bankruptcy during the prior year. You may even know a neighbor or friend in Medina that has either already filed or is considering filing for bankruptcy.
People file for bankruptcy for many different reasons. You may have suffered a job loss or reduction in income. Perhaps a family member has suffered a serious injury or illness and the medical bills are racking up. Understanding the reasons why people file for bankruptcy can help you better manage your finances while you rebuild your credit and avoid having to file again in the future.
Unexpected medical expenses
Several years ago, Harvard University conducted a study that discovered that almost 62 percent of people that file for bankruptcy do so because of medical expenses. Of those, 72 percent of them had health insurance that did not provide enough coverage to keep the injured or ill party out of debt.
Loss of income
As companies downsize, many people lose their jobs or watch their salaries get slashed. Even if you have saved enough for a rainy day, if you cannot return to your prior income level, you may find yourself drowning in debt.
Divorce is expensive and not just when it comes to paying attorneys' fees and court costs. When you divorce, you are probably going to have to give up approximately half of your assets. In addition, you may also end up with half of the debt you and your spouse accumulated during the marriage. This could also be a one-way ticket to bankruptcy.
People say that when it rains, it pours, or that bad things happen in threes. Imagine that on Monday your car breaks down and needs thousands of dollars in repairs. On Tuesday, a pipe bursts under your house and you have to pay thousands for a plumber. By the time Wednesday arrives, one more unexpected expense could put you deep in debt.
If you are facing one of the above scenarios, it could lead to your having trouble making house payments. Avoiding foreclosure is also one of the top reasons why people move forward with a bankruptcy filing.
If you feel like your debt is out of control and you are worried about losing your house or car, bankruptcy might be the best option to get you back on your feet. Your attorney can help you through the bankruptcy process so that you can start repairing your credit.