People sometimes assume that it is their own fault if they need to file for bankruptcy. In fact, this is one of the reasons that they will sometimes cite for procrastinating or avoiding bankruptcy altogether until moving forward become absolutely necessary. Because they consider their financial issues to be their own fault, they may be more hesitant to use bankruptcy to get out of debt.
But is bankruptcy actually a filer’s fault? It could be, but odds are that it is not. When you look at some of the top reasons for bankruptcy, you will find that the need to avail oneself of this opportunity stems from things that are relatively out of an individual’s control.
Top reasons for bankruptcy
Personal bankruptcy in the United States can occur for various reasons, and some of the most common causes include the following concerns:
- Medical expenses: High healthcare costs, unexpected medical emergencies or inadequate health insurance coverage can lead you into financial distress. If you are accidentally injured or become severely ill, you will probably get the medical treatment and focus on your health more than the cost. But that bill will eventually come due, whether you really had a choice in the matter or not.
- Job loss or reduced income: Sudden unemployment, reduced work hours or loss of a primary income source can make it difficult to meet financial obligations. But this job loss may not be your fault; perhaps the company had to downsize because of an economic recession, even though you were doing your job perfectly.
- Unexpected expenses: Natural disasters, home repairs, car accidents or other unforeseen events that require significant financial outlays can strain finances. Many people live paycheck to paycheck. If you do, your budget may work perfectly as long as things go according to plan, but one unexpected cost can upset the balance.
As you can see, there are plenty of ways in which bankruptcy can happen even though adults have been financially responsible prior to needing help.
Are you considering bankruptcy?
It’s crucial to note that bankruptcy is a relatively complex process. If you’re thinking about utilizing it to give yourself a fresh start financially, make sure that you are well aware of the legal steps you’ll need to take. You have to consider the different types of bankruptcy – such as Chapter 7 vs Chapter 13 – to determine what you qualify for and what will help you achieve optimal results in your unique situation. Seeking legal guidance can help you to get started.