There are a variety of reasons why people choose bankruptcy. Some common ones include job loss, medical expenses, and divorce.
If you are facing one of these circumstances, it may be time to think about filing for bankruptcy. The decision should not be taken lightly, but it can make a big difference in your life.
- Unaffordable Utilities
While job loss and medical debt are certainly the most common reasons why people choose bankruptcy, there are a lot of other factors that can lead to financial distress. For example, a divorce or business failure can leave people with unpaid bills and no way to pay them.
Those bills can include utility services, which may be essential to the daily lives of many people. This can include electricity, gas, water, and garbage service.
Unfortunately, those bills can become more and more difficult to pay if people struggle to make ends meet. Fortunately, filing for bankruptcy can help to prevent shutoffs from occurring.
When you file for bankruptcy, an automatic stay goes into effect that bars creditors and other entities from collecting any of the money owed to them. This includes prohibiting utilities from shutting off electricity, gas or water if you are behind on payments. However, you must provide adequate assurance to the utility company that you will continue to pay your utility bills during your bankruptcy. This can be done by providing a cash deposit, future prepayment or surety bond.
- Unaffordable Mortgages
While it is no secret that job loss and a lack of savings are the most common reasons people opt to file for bankruptcy, there are many more factors at play. An unaffordable mortgage is one of the largest culprits, but it is also a contributing factor to a number of consumer woes including increased credit card debt, lower household income and higher interest rates on existing loans.
Other major causes of financial distress include high medical bills, unexpected loss of a job, and failed business ventures. Several studies have found that bankruptcy is a significant factor in a majority of these cases. Bankruptcy is the best solution to these problems and offers consumers a chance at a fresh start, freeing up funds for essential living expenses. Using the services of an experienced bankruptcy attorney is the key to success in filing for bankruptcy and the smartest move you will make. Having the right lawyer by your side is crucial to protecting your assets and avoiding costly penalties for missed payments.
- High Medical Expenses
High medical expenses are an important contributor to bankruptcy filings. The uninsured have a particularly hard time paying their medical bills, as do people who
have lost their jobs or had unexpected accidents or illness.
The cost of healthcare has skyrocketed in the United States, and Obamacare hasn’t done enough to control this trend. This means that many people are carrying tens of thousands of dollars in medical debt, even after they have full-time health insurance coverage.
According to a Nerdwallet study published in 2014, medical debt is the leading reason that people file for bankruptcy. In fact, medical bills account for 62 percent of all bankruptcies in the U.S. The reason is simple: rising healthcare costs make it difficult to pay for medical care and prevent people from making timely payments on their mortgages, utilities, and credit cards.
- Unexpected Events
Unexpected events like job loss or medical complications can leave you with a hefty bill to pay. A sudden halt in income can make it hard to get by on your meager monthly salary, especially when you don’t have your insurance company’s blessing. Fortunately, a bankruptcy attorney in Harrisburg, PA can help you find the best way to recoup your losses and get back on your feet.
In general, the best way to avoid filing for bankruptcy is to learn how to budget your money wisely and responsibly. This will help you avoid debt, which in turn will improve your overall well-being. The best way to do this is by making a list of your financial goals and creating a budget that is realistic and achievable. Then you will know how much you can afford to spend each month. You might also want to consider taking out a loan or credit card, which will allow you to pay for your large purchases in smaller increments. Then you can repay it over time.