What Factors Most Often Lead to Bankruptcy? What Are the Potential Benefits of Seeking Protection in Bankruptcy?
Most of us struggle financially at one time or another. We may be the victim of downsizing at work, or we may suffer an injury or illness that keeps us from being gainfully employed. We may go through a divorce or let credit card debt get out of control.
What are the common reasons for considering personal bankruptcy? What are the potential benefits of filing a bankruptcy petition?
Why People Most Often File for Bankruptcy Protection
The common causes of bankruptcy filings include:
- Overwhelming medical debt—According to studies, about two of every three bankruptcy petitions filed cite unmanageable medical debt as the primary cause of financial instability. Some estimates find one in every three Americans saddled with substantial medical bills.
- Changes in employment—The loss of a job or a significant reduction in income are commonly cited as reasons for seeking protection in bankruptcy.
- Concerns about foreclosure or repossession—A survey conducted by LendingTree found that one of every three Americans with a mortgage makes at least one late payment every year, and as many as 6 million are delinquent on any given date. The New York Fed reported in 2024 that about 5% of people with auto loans are more than 90 days in arrears.
- Extensive credit card debt—The American Bankruptcy Institute reported that about two-thirds of all personal bankruptcy applicants listed credit card debt as a key reason for their filing.
How Can a Personal Bankruptcy Benefit You?
A personal bankruptcy filing can provide a number of benefits:
- You’ll immediately have the protection of the automatic stay, so your creditors will stop harassing you.
- You may qualify to permanently rid yourself of certain debts.
- If you don’t qualify to permanently discharge debts, you may still have the opportunity to work out new (and affordable) payment arrangements.
Contact an Experienced Rockwall, TX Chapter 13 Bankruptcy Attorney
Let us help you take the right steps and make good decisions when filing for personal bankruptcy protection. At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. To arrange an appointment, contact my office online or call 972-772-3083. I handle Texas personal bankruptcy filings in Kaufman County, Rockwall County, Collin County, Dallas County, Hunt County, and the surrounding counties.
