FOR LAWYERS

Bankruptcy Causes: What to Know

By
James Parker
/
October 4, 2021

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.

Medical Expenses

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.

Job Loss

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.

Unexpected Expense

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.

Ask a Lawyer

Ask your own question and get advice from expert attorneys
Ask Question

Featured Bankruptcy Lawyers

Way Law Firm, PA

25 years in practice
Bankruptcy, Child Custody, Child Support, Criminal Defense, Divorce & Family Law
View Profile

Crumbley-Blackwell-Price Attorneys

25 years in practice
Adoption, Auto Accidents, Bankruptcy, Child Custody, Child Support
View Profile

Trigilio, Stephenson & Dattilo, PLL

22 years in practice
Auto Accidents, Bankruptcy, Personal Injury, Wrongful Death
View Profile

Richardson Law Firm P.C.

12 years in practice
Hair Relaxers Lawsuit, Mass Tort, Personal Injury, Rideshare Lawsuits, Tepezza Lawsuit
View Profile

Adam Rieth - Injury Attorney

10 years in practice
Auto Accidents, Brain Injury, Motorcycle Accidents, Personal Injury, Truck Accidents
View Profile

Vanguard Attorneys

12 years in practice
Auto Accidents, Motorcycle Accidents, Personal Injury, Truck Accidents, Wrongful Death
View Profile

Contact AttorneyAtLaw.com

Are you looking for an attorney? Do you have questions about a legal case you are facing? Contact us now and we will put you in touch with a lawyer for free.
Attorney At Law is changing how clients connect with lawyers. By providing an innovative platform to lawyers who want to expand their practice’s reach, AAL is bringing law practices into the future.
6142 Innovation Way
Carlsbad, California 92009
Some of the content of this website may be considered attorney advertising under the rules of certain jurisdictions. The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute an attorney-client relationship.
crossmenuchevron-upchevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram