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Bankruptcy FAQ

Why do people file for bankruptcy?

On Behalf of | Jun 6, 2019 | Bankruptcy

You know, of course, that you may file for bankruptcy when you can’t pay off your debt. You may worry about losing your house or your car. You want a solution that allows you to keep your life intact and eliminate your debt. Bankruptcy may offer that, and it’s worth considering.

But why do people find themselves in this position in the first place? What you’ll find is that it may not be your fault at all. It’s not because of excessive spending or reckless use of money. It’s just an unfortunate circumstance that you couldn’t avoid, and you’re looking for a way out. It’s that simple.

Job loss

One of the main reasons for bankruptcy is losing your job. When you took out a mortgage or bought a car, you had a steady job. You knew that your debt made sense for your life. You acted in a responsible manner.

Then the local economy took a dive, and you lost your job as the company downsized. It wasn’t your fault at all. You were a good employee. But you may find yourself unable to make payments while you look for a new job, and it could lead to bankruptcy.

Medical bills

Another common issue is medical bills, which may put you in so much debt in a short time that you can never pay it off. For instance, maybe you came down with a potentially terminal disease. You needed expensive treatment and you had no alternatives. You also couldn’t work because of the disease. Suddenly, through no fault of your own, you have high debt and no income.

Unexpected costs

Sometimes, life throws the unexpected at you. Maybe you got hit with a natural disaster, like a tornado or a flood, without the proper insurance. Even using all of the assets you have left, you can’t cover those costs yourself. It’s surprising debt, it ruins your finances, and you need to find a solution that puts things back together again.

Your rights

These are just three different potential reasons, but they show you two things. First, bankruptcy can happen even when you’re careful and it’s not your fault. Second, it’s crucial that you know all about you rights and the options you have.

“Disclaimer – Attorney Advertising. Under Federal Law, we have been designated a Debt Relief Agency and we help people file for bankruptcy relief under the Bankruptcy Code. This information is not intended as legal advice and no attorney-client relationship is created. Results may vary. Results not guaranteed. Dramatization – not actual clients in pictures and videos. Thomas C. McBride, attorney in Alexandria, LA.”