Personal bankruptcy filings have been increasing. According to statistics from the United States bankruptcy court, over 1.5 million people file annually. You may be considering resolving your debt problems this way, and clearly you are not alone.
The statistics show that almost 97 percent of all bankruptcy filings are made by individuals rather than businesses, and for personal filings, Chapter 7 is the form used most often. Here are the main reasons that people consider this method for ridding themselves of crippling debt:
Mounting medical expenses
Medical expense is the number one reason for bankruptcy filings. In fact, according to a Harvard University study, 72 percent of those who filed even had health insurance, proving that financial distress is not only suffered by the uninsured.
Loss of income
Whether it is a major pay cut or complete loss of employment, the reduction of income is a big problem for most people. Considering that those who are without jobs face extra expenses, such as COBRA health insurance, bankruptcy may seem the only solution to debt issues.
Credit card debt
It is easy to run up credit card debt, and irresponsible spending is not always the cause. People use credit cards for emergencies, to pay medical bills or cover unexpected expenses, such as car repair.
Even without the legal fees involved, divorce is expensive. One partner may have to help pay off debts for which he or she co-signed. There could be loss of income or assets on one side or the other. Depending on the outcome of the divorce, bankruptcy might be a logical next step.
More action, less worry
When you take action to address your debt problems, you will begin to sleep better at night. Your bankruptcy attorney understands what you have been going through and can alleviate any fears you might have about loss of assets or credit standing. Even if foreclosure is coming up, there is such a thing as an emergency bankruptcy petition. Reach out for Chapter 7 assistance and get your life back on track.