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Five Of The Most Common Causes Of Bankruptcy

Not that long ago it was thought that if you filed bankruptcy you were bad with your money, or living above your means. There used to be a certain social stigma that went along with filing for bankruptcy, because your peers looked at is if you had failed somehow in budgeting or had overspent. But fortunately that is no longer the case, and a countless number of people who are struggling to make ends meet are able to get out of debt by filing for the protections offered by the bankruptcy laws. That said, there are still a lot of questions about what leads to the need to file for bankruptcy, because when we know the causes we might be able to find alternative solutions or have a better understanding of what is needed during a bankruptcy case.

Five of the most common causes of the need to file for bankruptcy include the following:

• Divorce: when a couple gets divorced and one household turns into two it is more than just the furniture and personal items that have to be divided. Debt also has to be divided and when two households have to be supported on the same salaries, it can be hard to make ends meet. This may be why a bankruptcy case is one of the most common companion cases to a divorce.
• Medical bills: healthcare costs are exorbitantly high and if you do not have health insurance or have a policy that requires you to pay a large sum out of pocket before your benefits kick in, it doesn’t take long for medical bills to add up to an amount that is not manageable for most people.
• Credit card debt: most credit cards have high interest rates and if you only make the minimum payment each month you will get nowhere fast on the outstanding balance. When you have multiple cards, you will end up owing a lot of money that is not always easy to pay back.
• Job loss: the economy has made victims of a lot of American workers, and that means thousands upon thousands of people are unemployed. Without gainful employment it is hard to pay the bills, and bankruptcy becomes the only option for a lot of consumers.
• The economy: not only are good jobs scarce, but the cost of living in general is on the rise. Employers are not able to keep up with the increased cost of living and that means many people are stuck at a salary that does not cover all of their expenses, even when no new expenses have been taken on.

Whatever your circumstances, we are here to help. Our team of bankruptcy professionals will let you know your options, and help you to feel comfortable with the decision to file bankruptcy.

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