Financial calamity can happen to anyone. Everything from sudden emergencies to poor spending decisions can put you in trouble. If you are considering filing for bankruptcy because of your money problems, you are not the only one. Over 700,000 people and businesses are likely to declare bankruptcy in 2018.
What is causing so many Americans to go bankrupt? Here are the top culprits for bankruptcy.
1. Medical debt
Health care bills can become insurmountable. Whether you get into a car crash, suffer a slip-and-fall accident or develop a serious health condition, you may end up with various types of medical expenses, such as ambulance costs, emergency room bills and expensive treatment. Thankfully, bankruptcy can erase or help you pay back medical debt.
Ending a marriage is a costly endeavor. Some reasons why divorce can drain your finances include:
- Living on a single income with double the expenses
- Dividing property and money
- Making support payments
- Taking on joint debt from your partner
- Legal fees
- Tax implications
Sometimes, divorce occurs because of existing financial problems that only worsen. Divorce can be financially and emotionally catastrophic. However, do not feel shame if you need to declare bankruptcy for financial relief after a divorce.
3. Loss of a job
Losing income can result in financial devastation. When you get news of a termination or layoff, you may not know what to do next. Without income, you may find yourself unable to afford even the most basic expenses. In this type of situation, declaring bankruptcy may be the best solution for a new start.
4. Poor spending or budgeting
Managing personal finances is not always easy. In a consumerist society, it can be easy to let things get out of hand. If you find yourself in a bind because of budgeting or spending issues, you may find that bankruptcy helps you get back on your feet.