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Bankruptcy Help For Everyday People

What is the main reason for bankruptcy? 

On Behalf of | May 3, 2021 | Chapter 7 Bankruptcy |

When someone says they’re going to declare bankruptcy, you may assume that they made poor financial decisions. Maybe they spent too much money, lived beyond their means or they took on bad debt that had too many risks. 

But is this actually true? When you look at the main reason for consumer bankruptcy filings, you’ll see that the vast majority have almost nothing to do with poor financial decisions. 

Nothing strikes more often than medical debt

The top reason that Americans declare bankruptcy is simple: Medical debt. Medical issues contribute to about two-thirds of all personal bankruptcy filings

Some of these individuals have insurance. Some do not. What they have in common is that something unexpected put them in the hospital. It may have been a sickness or a chronic illness. It may have been an accident or an injury. They knew they needed medical attention and they got care at some of the best centers in the state, but they ran into more debt than they could ever afford. 

In some cases, there is an additional toll taken by lost wages. If a medical emergency leaves you with $1.5 million in bills and causes you to lose your job because you were in the hospital for a month, the combination of expenses and lost income can mean bankruptcy is the only way forward. 

Understanding your options

You can’t always avoid financial issues. They may not be your fault at all, and you shouldn’t take the blame. Instead, just take the time to look into all of the legal options you have to declare bankruptcy. 

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