Top 8 Reasons Why People Go Bankrupt

The statistics of bankruptcy in America are alarming. According to US bankruptcy court statistics, more than 1.5 million people file for bankruptcy every year. Most significantly, nearly 97 per cent of bankruptcy filings are made by individuals, not by businesses. Here are some of the reasons why people go bankrupt:

Medical expenses - A recent study from Harvard shows that medical expenses account for nearly 62% of personal bankruptcies in the United States. The research also showed that 72% of those who filed for medical insurance had health insurance. This debunks the myth that only the uninsured face financial crisis during medical-related expenses. 

Reduced income - Companies like to cut down on their expenses. This means that many employees face a pay-cut and reductions in bonuses. The result to employees can include bankruptcy. 

Job loss - Job loss can deplete one’s savings and assets. Also, the people who face a job’s loss have no understanding about when and how they can be employed later. This is why a lot of people who face job losses face bankruptcy. 

Credit debt - Credit debt isn’t just caused by irresponsible spending. This debt can also pile up due to various catastrophes such as job loss, illness, disabilities and unexpected income reduction. Emergency expenses can also pile up your credit debt. 

Divorce - Divorce is a very costly business. Divorce and separation mean a significant amount of loss in the income of a person. It may also mean taking on a portion of your partner’s debt if you co-signed or opened joint accounts with them. 

UnexUnexpected expenses - pected expenses and emergencies can cause you a lot of financial loss. Just the occurrence of one of these events can quickly drain the savings that have taken years to accumulate. 

Student loans - Student loans can cause a lot of people to go bankrupt. 

Utility payments - The increasing costs of heating, air conditioning, electric light and other necessities can quickly help in paving the way for bankruptcy. 

Kenneth Halpern has been extending services as a legal counsel to his clients for over 35 years. He is a Long Island-based bankruptcy lawyer who can offer strategic advice to discover alternatives to bankruptcy. He is known to create individualized solutions for your problems. Kenneth Halpern is the lawyer you need to solve your financial troubles and situations. 

An ineffective counse can only cause more damage to your existing situation. Hence, one should be wise in choosing a lawyer for bankruptcy. Considered to be the best Nassau County’s bankruptcy lawyer, he will help you get out of bankruptcy! 

Read More: What Is The Role Of A Bankruptcy Lawyer