Bankruptcy, a government law that allows you to seek relief from your debt and creditors, is sometimes the only means to be able to regain financial stability. There are several reasons why someone might file for bankruptcy to begin with, and many of these reasons could easily happen to anyone.
Loss of Job.
Whether someone has been laid off, terminated or resigned, there are several factors here that can contribute to filing for bankruptcy. Some may be left without a severance package and not have an emergency fund in place. Therefore, they might turn to their credit cards to pay their bills, which can be a slippery slope if the income situation does not improve quickly.
Similarly, even a temporary loss of disability insurance coverage is sometimes enough to cause someone to file for bankruptcy. Not being able to find a job in a sufficient amount of time can also be cause someone to file as well.
Inability to Control Spending.
The inability to control spending often causes people to turn to their credit cards in order to make certain purchases. Over time, however, this can lead to an excess of credit and some may find that they are unable to even make the minimum payments on their credit cards anymore.
If an individual is not able to borrow money from family or friends or obtain a debt-consolidation loan, then bankruptcy is often the only option left. In the end, the problem comes down to more money going out than coming in.
There are several factors in a divorce or separation that can eventually contribute to the need to file for bankruptcy. This includes high legal fees, which can be enough to cause bankruptcy in and of itself. There is also the division of assets, child support and/or alimony (especially in the instance where one partner refuses to pay) and all of the costs associated with maintaining two houses after the divorce or separation.
Unexpected expenses due to events beyond one’s control, such as the loss of property due to natural disasters, like earthquakes or theft are other reasons why some may have to file for bankruptcy. This might come down to the failure to have separate coverage for natural disasters in place, which some homeowners are not aware of. In this case, these people lose both their homes and all of their possessions in the process. This could make it difficult to return to work, which compounds the problem even more.
If you are currently having financial troubles, contact Kevin Thatcher and Associates today. We offer both debt consolidation and can help with a bankruptcy filing. We have over ten years of experience in the business and can help guide you through this difficult process and answer all questions you have. We also offer free consultations.