It’s often discussed that the leading reason that people file for bankruptcy is that they have medical debt. There are a lot of reasons for this, from the fact that medical care is incredibly expensive in the United States to the reality that most people are going to take on that debt if they need serious or even life-saving treatment.
But why else do people end up filing for bankruptcy? Maybe you don’t have any medical debt, but you’re wondering if bankruptcy is eventually going to be something you need to use. Let’s look at a few more of the top reasons.
Earning less money
One thing to remember is that it’s not just about debt, but about your debt in the relation to your income. Those who start to make less money or go through job loss often run into bankruptcy simply because their wages no longer can keep up with the debts that they thought were affordable before.
Something unexpected happens
Many people feel like they are financially secure, but they’re not actually that far away from bankruptcy. When unexpected bills come up, they don’t have the savings to cover them. This becomes even more of a problem during a recession or any other time that money is tight.
Spending too much
While it is certainly not the top cause of bankruptcy, it is true that spending too much can lead to unsustainable debt. This is why it’s so important to create a budget after you file for bankruptcy, giving you some guidance so that you don’t end up back in the same position again.
No matter why you’re considering bankruptcy, take the time to look into all of the necessary steps and the financial options at your disposal.
