If you are considering filing for bankruptcy, you may have concerns about whether there is a stigma attached to doing so and whether others might get the impression you are unable to manage your finances on your own. Contrary to popular belief, however, most people who file for bankruptcy do not get there because of reckless spending.
Instead, bankruptcy can offer a fresh start to those who find themselves in financial distress, and many who utilize it find they need it for similar reasons that have little, if anything, to do with irresponsibility. More specifically, most people who file for bankruptcy make the decision to do so because of:
Medical debt
According to one Harvard study, more than 60 percent of those who file for bankruptcy cite overwhelming medical debt as their primary reason for doing so. In many cases, unforeseen medical needs or chronic diseases lead patients and their families to rack up considerable medical bills, and often, insurance will not cover certain treatments, forcing some to pay out of pocket. High insurance deductibles, too, often contribute to the problem.
Losing a job
The economy can go up and down in waves, and job security is something not everyone has. If you are like many Americans, you may have little choice other than to file for bankruptcy after unexpectedly losing your job, and problems may increase if you also lose health insurance after your firing.
Marital changes
A third reason many people in America file for bankruptcy is divorce. Many couples divorce because of financial issues, and if such issues exist during the union, they may intensify post-divorce. In addition to having to pay legal fees relating to the divorce, you may adopt additional expenses, such as child or spousal support. Furthermore, you may struggle to pay for your home, your children’s school or sports, and other expenses you once split between you and your ex-spouse before the divorce.
In closing, most Americans file for bankruptcy not because of personal failings but because of outside factors that can have a serious impact on finances. Bankruptcy exists for a reason, and eliminating the stigmas associated with it may help more people like you find relief.
