Bankruptcy is the ultimate financial fear. But most actual bankruptcy causes are less about poor decision-making and more about unexpected, expensive, or inevitable life developments.
In 2019, the American Journal of Public Health conducted a survey of causes of bankruptcy. They found that two-thirds of all bankruptcy filings arise from copays, insurance gaps, and time lost from work. In the event of a serious illness or injury, insurance can reach its limits and hundreds of thousands of dollars in medical bills can come pouring into a victim’s life.
Far from being the result of some ill-fated financial decision, medical expense-related bankruptcy can come from cancer, being hit by another driver, or just being in the wrong place at the wrong time. For these people, when their home equity, savings, investments, and trust funds have been exhausted, bankruptcy can be the last refuge available.
Another major cause of bankruptcies is the loss of a job. Whether due to layoffs, termination, or quitting, the loss of a job can immediately and devastatingly impact someone’s life. According to PR Newswire, 54% of Americans are living paycheck-to-paycheck. That means more than half of the nation cannot afford to put away income for emergencies.
In a climate of stagnating wages and ballooning cost-of-living, even a few months without work can drain a household of all resources, especially when most Americans do not receive severance pay and the unemployment payment process can take weeks to navigate. With nowhere else to turn, many place themselves at the mercy of the bankruptcy courts seeking relief.
Sometimes the disaster that befalls someone doesn’t need to be a lost job or a medical emergency. In the current economic climate, even a major theft like a loss of a car or work computer can jar a delicately balanced budget. Homeowners who were unaware that their policy excluded wildfires, earthquakes, or flooding can find themselves saddled with the full cost of rebuilding a destroyed home.
Regardless of the underlying cause, an unexpected expense can be devastating to the financial wellbeing of the victim. This is especially true if the victim cannot afford to stash revenue for hard times.
If you are considering bankruptcy, you are not alone, and likely it is not entirely your fault. If you want the best possible outcome in your proceedings, you should consult a bankruptcy attorney.
A bankruptcy attorney can advise you on the right bankruptcy chapter for you, help you navigate the forms and bylaws governing bankruptcy in your state, and help you exempt or preserve more property than you may have been able to on your own. The best place to find a bankruptcy attorney is Attorney at Law.
At AAL, our nationwide network of law firms and attorneys allows us to match you with a bankruptcy attorney in your area. Our partners have the resources, legal expertise, and experience to help you achieve the best possible outcome in your bankruptcy filing.
In addition to a distinguished record, our partners excel in client care. We understand the stress of filing for bankruptcy. That’s why our partners strive to make the process as quick and efficient as possible while keeping you updated the whole way.
Don’t wait. Contact AAL today for a free, no-obligation consultation and begin your journey to financial freedom.