If you are one of the millions of Americans struggling to make ends meet, it is important to understand that you are not alone. 2023 is proving to be challenging for many people, with increasing inflationary pressures closing in from all sides. Even employed individuals who have not experienced any loss of income are feeling the pain of rising grocery bills, gas prices, and energy costs. Although experts recommend that people set aside an emergency fund of three to six months, those balances can drain quickly when the cost of living is elevated.
The truth is that people from all walks of life declare bankruptcy every day to achieve relief from overwhelming debt. Is it time for you to consider bankruptcy?
Filing for personal bankruptcy can have long-term effects on an individual’s credit score and will impact their ability to borrow money in the future. Therefore you should seek the advice of an experienced bankruptcy attorney to understand your options before proceeding. If you are wondering if your situation is appropriate to consider bankruptcy, here are five common reasons why people just like you have chosen bankruptcy to regain financial footing and a fresh start.
Medical Expenses: Medical bills are considered among the most common causes of personal bankruptcy in the United States. According to research, 66.5% of bankruptcies are caused directly by medical expenses, and 17% of adults with healthcare debt declared bankruptcy or lost their homes due to their debts in 2022. Medical bills are challenging because they are often unexpected, and the individual who requires the surgery or treatment is often the family breadwinner. These bills can quickly add up, especially for those who are uninsured or have high deductibles.
Unemployment: The job market has been volatile since the recent pandemic, with many companies struggling to maintain payroll or keep their doors open. Losing a job can significantly impact an individual’s financial stability. Without a dependable income, making ends meet and paying off debts can be nearly impossible, especially in today’s economic environment. If an individual cannot secure new, well-paying employment promptly, bankruptcy may become the only option for managing their debt.
Credit Card Debt: When the economy is difficult, many people use credit cards to help pay the bills. Although most rely on credit cards as a short-term solution, this debt can quickly spiral out of control as the hardship continues. Using credit cards to make ends meet is common, but it can result in the individual being overwhelmed with debt they cannot afford to pay – especially if they cannot make even minimum payments. Bankruptcy is a legal and valid way to get relief from credit card debt.
Divorce: The divorce process is often quite costly, with legal fees and the liquidation or division of assets contributing to the financial pressure. It is common for those who have gone through a divorce to file for bankruptcy to manage the additional debt. Many factors determine whether or not divorce or bankruptcy should come first. Speaking with a professional bankruptcy attorney is imperative if you are considering divorce and fear it may make bankruptcy necessary.
Foreclosure: Losing a home through foreclosure can be a devastating experience, and trying to avoid that situation can lead to bankruptcy. When a homeowner cannot make their monthly mortgage payments, they may consider bankruptcy to save their home.
While bankruptcy is nothing to be ashamed of or embarrassed about, no one should file without understanding the ramifications for their future.
Richard V. Ellis has helped hundreds of Sarasota residents to make the best financial decisions for themselves and their families. Call today to learn more about your options.
