What Are the Most Common Reasons Why People File for Bankruptcy?

Bankruptcy is a personal decision, and while some people are uncomfortable talking about financial problems, it’s important to understand that there are many others in the same position. When you’re struggling with calls and other types of pressure from creditors and collection agencies, it might be time to discuss your particular circumstances with a qualified bankruptcy attorney.

A knowledgeable lawyer can review your situation and advise of your options. Each bankruptcy case has unique elements, though a large portion of filings stem from one or more of the following factors:

• Job loss — Even during strong economic times, unexpected firings occur. At-will employment laws give companies the ability to dismiss workers without reason or warning. When there’s no steady paycheck, it can become nearly impossible to keep up with monthly expenses, including mortgage or rent payments, utility bills and credit card debt. Even with unemployment benefits, many individuals find themselves falling behind financially.
• Medical expenses — One accident or illness can impose severe financial stress on a family. Sometimes, having health insurance is not enough to cushion the blow due to high deductibles, copays, uncovered treatments and missed work. Medical expenses are particularly burdensome for individuals dealing with chronic illnesses or long-term care needs.
• Housing costs — Heavy mortgage obligations, elevated rents, high interest rates and expensive home repairs can strain a household’s budget. Bankruptcy can provide relief by halting foreclosure proceedings or allowing individuals to restructure their debts.
• Credit-card balances — The first step when people start having difficulty making ends meet is often to shift some expenses to credit cards. Unfortunately, excessive interest rates and penalty fees could trap someone in a cycle of debt even if they are earning a steady income. 
• Divorce or separation — A breakup between spouses or an unmarried couple with shared finances can be devastating. Along with the loss of partner’s income, you might also be facing legal fees as well as alimony and child support responsibilities. 

While the reasons for filing bankruptcy vary, the goals are the same: to stop creditor harassment and make a fresh financial start. If you’re facing overwhelming debt due to income loss, medical expenses or other challenges, Jeff Field & Associates can help. From offices in Douglasville, Gainesville, Bogart, Lawrenceville, Marietta and Decatur, we provide strong legal support for Georgia residents struggling with debt. Please call 404-381-1278 or contact us online to schedule a consultation.