The Factors that Lead to Most Bankruptcy Filings
Have you lost your job or taken a cut in pay? Have you suffered an injury or illness that’s caused you to incur substantial, unreimbursed medical debt? Did you take out an adjustable rate mortgage on your home and now find that you can’t make the monthly payments? You’re not alone—the same thing has happened to countless people across the United States. Fortunately, that’s exactly why American bankruptcy law exists—to help ordinary folks who experience financial challenges because of unforeseen hardships.
What Are the Most Common Reasons People File for Bankruptcy Protection?
Though bankruptcy typically is brought on by a combination of factors, there are specific circumstances that lead to most filings:
- Medical expenses not covered by insurance—The single biggest reason for bankruptcy, unreimbursed medical expenses can quickly get out of control. Some sources suggest that as many as two of every three personal bankruptcy petitions involve unmanageable medical debt.
- Loss or reduction of income—A recent study found that slightly more than one in four Americans had $1,000 in the bank in the event of an emergency, such as a job loss. Unfortunately, the loss of a job often means the loss of medical insurance, further compounding the problem.
- Mortgage debt—A recent report found that one of every two homeowners has struggled over the past year to stay current with mortgage payments. In many instances, the inability to make mortgage payments stems from a dramatic increase in monthly payments under an adjustable rate mortgage (ARM).
- Unmanageable credit card debt or consumer spending—Credit cards can provide benefits if used wisely, but too many consumers tend to view them as another resource to purchase consumer goods. It can be easy to rack up debt but difficult to get it under control, particularly with cards that carry a high interest rate.
Contact an Experienced Rockwall, TX Bankruptcy Attorney
At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. To arrange an appointment to discuss your rights and options in bankruptcy, 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.
