According to information from the government, personal bankruptcy numbers fell by 6.9% for the period from June 30, 2015 to June 30, 2016. The decline is due in part to congressional legislation that has resulted in tighter eligibility requirements. However, debtors still have a variety of reasons to file. Below is a list of the most common reasons for bankruptcy in the US.
According to a Harvard University study, medical bills are the reason behind 62% of personal bankruptcies. However, the study showed that 78% of those filing had some type of health coverage, which dispels the myth that only the uninsured are affected by high medical bills. A serious or rare disease can quickly add up to thousands of dollars in bills that can wipe out retirement and college funds, and once funds are exhausted, hiring a bankruptcy attorney in Hamilton, OH may be the filer’s only option.
Whether it’s due to resignation, termination, or layoff, the loss of a job can be devastating. Some people are lucky to get a severance package, but many lose their jobs with little or no notice. Lacking an emergency fund can worsen the situation, and paying bills with credit cards can have disastrous consequences. The loss of employer-sponsored health insurance can drain a job seeker’s resources, and those unable to find a job for a while may not be able to financially recover in time to avoid bankruptcy.
Poor Credit Management
Some people, much as they try, cannot control their spending. Installment debt, credit cards, and car loans can eventually get out of hand, leaving the borrower unable to make even minimum payments. If a borrower cannot get help from friends or family or get a debt consolidation loan, bankruptcy is often the only choice.
Separation or Divorce
A marital dissolution can create tremendous financial problems for both parties. Legal fees can be high, and many people are left to pay spousal and child support after losing half their assets. Combine that with the cost of maintaining two households, and the costs are enough to force many people into bankruptcy. Clients can get more information from a bankruptcy attorney in Hamilton, OH.