Top Reasons People File for Bankruptcy

In popular culture, people who file for individual bankruptcy are often depicted as unreliable, or responsible for their own financial downfall. While there are certainly people who are careless with their credit cards and other resources, the fact is that most bankrupt Americans are hard-working people who just fell on difficult times.

At The Buchalter Law Group, we’re dedicated to helping struggling homeowners and debtors turn over a new leaf after they apply for bankruptcy. Although bankruptcy should never be pursued lightly, for many people it can provide much-needed freedom from impossible debt burdens.

Here are some of the most common reasons our clients decide to file for bankruptcy:

  • They suffered a substantial pay cut or bonus reduction. During an economic downturn, many employers choose to eliminate or cut pay for most employees. Without solid job prospects, and facing the same day-to-day expenses, it’s easy for people to fall behind on their mortgage or loan payments.
  • A major injury or illness caused their medical costs to rise dramatically. According to a study done at Harvard University, more than 60% of all bankruptcies are caused by a steep increase in medical expenses – and the vast majority of filers had health insurance at the time.
  • They were dealing with a difficult divorce. Whatever the cause may be, a marriage that falls apart can lead to months of expensive legal battles. One partner may also lose significant income or assets after a spousal or child support order is decreed.
  • A serious emergency cost them their house or car. Tragedy can strike us at any time in the form of a natural disaster. Whether caused by a hurricane or a forest fire, damage to your house can cost thousands of dollars and drain your savings account.
  • Student loans caught up to them. Across the country, students owe more than $1.5 trillion in collective debt, and that burden is only expected to increase exponentially with every passing year. Although many people believe that a college education can increase their earning potential, it may take decades for certain degrees to pay off, costing debtors their hard-earned money in the process.
  • Credit card debt. Of course, credit card debt does play a significant role in most bankruptcies. However, this kind of serious debt is rarely caused by excessive shopping and reveling. Most people turn to credit cards first when dealing with medical expenses, rising utility payments, or a job loss, which can add to their debt over time.

No matter why you’re applying for bankruptcy, our compassionate bankruptcy attorneys at The Buchalter Law Group are here to help. We have more than 40 years of combined experience helping people start down a new financial path, and we can provide a listening ear for your story. Call us at (321) 320-6088 today for more information.

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