Corash & Hollender, P.C.

3 common reasons people face bankruptcy

The statistics on bankruptcy may seem alarming, but the reality is that people do not choose bankruptcy - sometimes it is inevitable due to particular life circumstances. If you are confronting financial trouble, we know that it is not because you are irresponsible. Life happens, and some things are simply out our control. For example, these issues can abruptly alter financial stability.

1. Medical Expenses

There is huge reason that nearly every political and business discussion today includes something about medical insurance. Medical expenses are still the number one cause of bankruptcy for individuals, and it is creeping up on the list for business bankruptcies, as well.

Medical expenses wipe out savings faster than perhaps any other expense because they are unanticipated and immediate when they do hit.

2. Loss of Employment

The job market still faces a great deal of transition in the modern era. Right when everything appears to be getting better, the employment pulse can change. Even if a layoff comes with severance pay, job loss can quickly eliminate one's savings and assets.

Moreover, it is worth mentioning that loss of employment does not necessarily mean the total loss of a job. Many employers are cutting back hours, implementing pay cuts, and reducing monetary bonuses. This means there is not always enough to cover everyday expenses.

3. Divorce

The breakup of a family usually means the breakup of finances. Marriage can be a pillar of financial stability for some. When it fails, someone usually stands to take a huge hit to his or her wealth. Moreover, the dissolution process, itself, can be financially exhausting. This is especially true when divorce is overly litigious among spouses.

If you are facing unexpected financial stress, know that you are not alone. It is not embarrassing. It is truly time-sensitive event. To help power through difficult times, consider meeting with an experienced bankruptcy lawyer. At a minimum, a professional can help assess your situation.

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