There are many causes of bankruptcy: Don’t be afraid to ask for help

| Nov 25, 2020 | Bankruptcy Law

2020 has been a tough year for a lot of people. The economy took a dive, and many found themselves out of work or working fewer hours. 

Financial problems can be embarrassing, exhausting and overwhelming. You should know, however, that there is help available to you and that you should not be ashamed to reach out. Bankruptcy protections are there for situations just like yours — and many others.

What are the most common causes of bankruptcy?

The common causes of bankruptcy include:

  • Income loss, such as a job loss or cut in hours
  • Medical expenses
  • High living expenses/mortgage rates/foreclosure
  • Medical problems leading to lost work hours
  • Divorce
  • The birth or death of a family member

These are major factors that can influence how much income a person or family has and significantly increase the risk of bankruptcy. Many of these things are entirely out of anybody’s control.

Is bankruptcy right for you?

Whether or not bankruptcy is right for you depends on the specifics of your situation. Your attorney would be happy to go over your finances with you and let you know if a Chapter 7 or 13 bankruptcy could help. Bankruptcies can’t eliminate all types of debts, especially most student loans or tax debts, but they can help reduce or eliminate what you owe if you have unsecured debts, like personal loans, credit cards and medical bills.

While no one chooses bankruptcy as a first method of getting out of debt, it may be what’s right for you if you’ve tried other ways and been unsuccessful. Our website has more on what you should consider if you are struggling.