Bankruptcy is a common term that you might be aware of as various companies and individuals are becoming bankrupt. Bankruptcy is filed under various situations or for various reasons. It is a financial condition where you cannot manage your debts and other bills. A recent survey shows that many individuals have started filing for bankruptcy in the United States. Cain and Herren are financial attorneys who can help you in filing bankruptcy. You can visit their Facebook page for more info. You can find a full list here on various online sources about the legal laws related to Bankruptcy.
What is Bankruptcy?
Before knowing about the reasons for bankruptcy, you should be aware of what bankruptcy is. It is a financial status of a person who is unable to pay his debts. He is in an unfavorable situation that he cannot manage his daily expenses.
The article below lists some of the reasons why people prefer to file bankruptcy.
Excessive Medical Bills
It is said that people who could not afford to pay their expensive medical expenses mostly opt for bankruptcy. There may be situations that you or your family member is involved in an accident that puts you in the burden of unmanageable medical bills. Statistics show that the majority of personal bankruptcies are filed due to financial burden due to the hospital and medical bills. Though health insurance covers medical expenses, other expenses end up being too high.
People who own business would be dealing with various debts as they may require money for investment. If they experience loss in their business, they could not manage to pay off their debts. This situation forces them to file for bankruptcy so that they can get relieved from all their liabilities.
People who lose their job are more likely to file bankruptcy. People without a job cannot sustain their living with their small savings. They are also at the risk of losing their health insurance benefits as they are out of their work. Thus they cannot afford to pay for their medical needs. This forces them to apply for bankruptcy.
This may sound weird, but this is also the major reason that people file for bankruptcy. Divorce or physical separation of a husband and wife can lead to various financial problems. Divorce leads to splitting of their financial assets and their income. This puts them in a situation where they find it difficult to bear their expenses for living. Thus a marital breakup can lead to a situation where they cannot manage their basic household expenses and end up in filing bankruptcy.
Excess Credit Card Bills
When people could not manage their expenses, they end up using their credit card for all their expenses. They might have lost their current job or made use of all their money for medical or other emergency expenses. This would have forced them to make use of credit card for meeting out their daily expenses. When they are unable to pay their excess credit card bills, then they are forced to apply for bankruptcy.