The decision to declare bankruptcy is a very significant one, and is never taken lightly. And yet, every year more than 500,000 people declare bankruptcy across the United States. The reasons that people declare bankruptcy are varied, but tend to fall into a few broad groups. Here are five of the biggest reasons that people consider declaring bankruptcy:
- Medical debt
- No single cause of bankruptcy is more commonplace than medical debt. Emergency medical expenses can easily result in thousands of dollars of debt, even for people with insurance. As a result, even a relatively minor medical emergency can cost far more than most people can afford, leading them to consider declaring bankruptcy.
- Natural disasters
- Another common cause of bankruptcy is a result of natural disasters. Fires, floods, storms, hurricanes, and earthquakes can all cause enormous damage to people and their property, leaving them with equally enormous expenses. If they do not have insurance to cover the harm they suffer from these disasters, the only way out of debt may be declaring bankruptcy.
- Emergency maintenance and repairs
- There doesn’t necessarily need to be a disaster for things to get damaged or break, however. Appliances and utilities can break down over time, and vehicles require regular maintenance to be safe to use. When a boiler breaks or a car’s transmission fails, it can leave someone with thousands of dollars in expenses they can’t afford to pay, forcing them to consider declaring bankruptcy.
- Sudden unemployment
- Sometimes the issue is not sudden expenses, but rather a sudden loss of income. Losing your job means that previously manageable debt can quickly become unmanageable, without the income you need to pay off that debt. If you stay unemployed for too long, you may want to consider declaring bankruptcy as a way of seeking financial relief.
- Divorce or separation
- It is no surprise that divorces can be expensive, but legal fees are just the start of the financial troubles that can arise during a divorce or separation. The loss of a spouse’s income can be a severe financial blow on its own, and then there are additional potential burdens from child support or spousal maintenance. For some people going through a divorce, declaring bankruptcy may be a good way to avoid crushing debt.
Bankruptcy is a complicated and stressful process, and one you shouldn’t attempt to undertake on your own. If you are in severe financial distress and considering bankruptcy, call the bankruptcy attorneys at McGuire, Pelaez & Bennett at 631-348-1702, or visit our contact page. Our offices are conveniently located in Central Islip, right here on Long Island. Our bankruptcy attorneys will work with you to ensure the best possible outcome for you and your family, and make sure that you gain the maximum possible benefit from bankruptcy protection.
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