Most people dread bankruptcy, but it’s one of those situations they never expect to happen. Bankruptcy is not the most common occurrence in a regular person’s life. Still, everyone should be aware of certain miscalculations that might lead to it. Should you ever find yourself needing such protection, you will be grateful to have such a robust and effective bankruptcy system in the US.
Even if you carefully spend every dollar and meticulously allocate your hard-earned money, there are certain events in life you can’t control that might lead to bankruptcy. It was best to be prepared and talk to the bankruptcy attorneys at the Law Offices of Mark L. Miller. These are some of the most common reasons for bankruptcy that they shared:
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Unregulated Spending
Money management is a skill not everyone is keen on learning. However, some people tend to learn it the hard way, which is one of the most common reasons for bankruptcy. No matter how proficient you are at managing your money or how hard it is for you to stick to a budget, you can only rack up debt so much before it becomes overwhelming. You may fall into severe debt after failing to pay your credit card charges. People choose not to think about this until there’s no more safety net left to fall into.
It is possible to get into such deep debt that bankruptcy is the only way out if you are unable or unwilling to curb your spending. You might be able to benefit from chapter 7 bankruptcy.
Out-of-Hand Expenditures
A person who thinks they are good with money might not realize that they might be at risk of financial difficulty if they encounter one unexpected expense. Accidents, medical emergencies, and significant breaks in your home are just some of the reasons that might drain your pockets dry, leaving you bankrupt. These expenses may only add more difficulties if you are already struggling to make ends meet. Lack of savings leaves you completely vulnerable to such occurrences.
The unexpected expense of a large purchase can put you in an uncomfortable financial situation, even if you’re generally good with money. It is often challenging to recover from this, which makes bankruptcy a desirable option.
A Debt From Medical Expenses
It is not uncommon for people to find themselves in need of bankruptcy protection due to unexpected medical expenses. A serious illness or an injury is next to impossible to predict, and even with insurance, you might end up indebted with thousands of dollars.
A chronic condition that requires a constant medication regimen, such as diabetes or high blood pressure, may make this even more evident. Although your insurance may cover some of the cost of medications, the cost can still be very high. In addition to surgery, your financial situation will deteriorate further if you are hospitalized for an extended period of time.
A Sudden Income Loss
A sudden job loss might put you in a challenging financial situation. It might suddenly become impossible to cover monthly bills and debts.
It’s common for people to resort to credit cards and fast loans during difficult financial times when their savings dry up. If these are your only source of income, you may sink even further into debt because interest rates can soar.
Being financially challenged may not sound pleasant, but it can happen no matter how careful you are, especially during crises like these. There is a solution to help you get back on your feet. If you hire the right bankruptcy attorney, you will be protected and able to rebuild your finances as soon as possible.
