People often stereotype those going through bankruptcy, assuming they must have simply spent more than they could afford on frivolous items. They assume poor choices alone led to their financial situation.
The reality, though, is that many people end up facing bankruptcy for issues that are almost completely out of their control. Three examples are listed below:
Your spouse comes up to you after 10 years of marriage and, out of the blue, asks for a divorce. Your income is cut in half, the divorce itself is costly, and you can’t make ends meet after losing half of your assets.
2. Losing a job.
You’re doing a fine job at work, but the economy just isn’t where it needs to be. Your company has to downsize. You have the least seniority, so your boss calls you into his or her office and tells you that they’re letting you go. They feel bad, but they have to look at the big picture and they just can’t afford to pay you. You took on debt based on that income, so now you’re sunk.
3. Medical expenses.
You go in for a routine checkup and get some unexpected news: You have cancer. It can be treated, but it’s going to be incredibly expensive. You feel like you have to do it, but it’s not a debt you were prepared to take on.
These are just three examples, but you can see just how helpless people facing bankruptcy may feel. A lifetime of good financial choices can be quickly washed away. In these situations, it’s important for them to know what legal options they have to get back on their feet.
Source: Investopedia, “Top 5 Reasons Why People Go Bankrupt,” accessed Sep. 29, 2017