Top Reasons People Choose Bankruptcy
Bankruptcy has always been something that's kept taboo and hush-hush. Some people choose not to talk about bankruptcy because they believe it makes them a failure regarding their finances, but that's not the case. There are so many common reasons that people file for bankruptcy because so many are out there filing for it. We are not living in a fair world where salaries match inflation, and our outgoings meet our incomes.
Almost all of us live above our means because the means have become so out of reach. It's important to realize that choosing bankruptcy doesn't make you a failure, and a debt defense attorney will tell you the same thing. Understanding why you are in this position takes a lot of self-education and research, but you can come out of this space on the other side in one piece. Let's look at some of the top reasons people choose to go bankrupt.
They've lost their income. One of the most significant strains on finances is losing your income in the first place. If you've lost your job, whether that's due to illness or no fault of your own, such as redundancy, and you haven't managed to find something new to replace it so that you can continue to meet all of your expenses. Then, you will need to look at bankruptcy as an option. Losing your job can also mean losing your health insurance, making you very vulnerable to more significant medical expenses unless you find insurance. It can be devastating to lose your job, but losing your income can have a knock-on effect on everything else in your life.
Medical expenses. If you are living in the US, then you understand that the capitalist hellscape that is the health insurance business is going to be on your back. Medical expenses are another major factor contributing to bankruptcy in the US, and medical problems can also lead to job loss. If you've lost your job and your insurance, then you suffer medical issues; you're still going to be faced with a bill unless you go bankrupt.
Your mortgage has become unaffordable. Home mortgages are typically the most significant household debt in the US and most of the world. They far surpass credit cards, student debt, and car loans. And if you can't afford your mortgage anymore and your house goes into foreclosure, going bankrupt could be your only option. Lenders will sometimes approve a buyer for a larger loan than they can afford to pay, and if that's the case, you risk losing your home to foreclosure if you don't make the repayments.
Bankruptcy is not a life-ending thing. Anybody can come back from it, and while it takes some time to take bankruptcy and any other credit misses off your credit file, you can still stay on top of your life.
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