Four Most Common Reasons for Bankruptcy

About ten percent of Americans have filed for bankruptcy at some point of their lives. If you have found yourself in financial trouble, you may feel a deep sense of shame. However, you should not delay contacting a Rockville bankruptcy lawyer about your options. The lawyer has likely helped many people in similar situations. You should be treated with dignity and respect by the lawyer throughout this process.

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Medical Debt

About two-thirds of bankruptcies result from medical expenses. To add insult to injury, health conditions rob you of the energy that you need to work to earn money. 

Job Loss

In difficult economic times, people lose jobs. Some companies send jobs overseas. It takes time for people to retrain and enter the job market in a new field. These situations are largely the result of economic and social policies that are outside of your control. It’s important to be gentle with yourself while you’re looking for a new position.

Credit Card Debt

American culture thrives on consumption. It’s hard not to buy items on credit to appear to keep up with your friends and neighbors. Some people use credit to shop or engage in activities that distract them from life stressors. Unfortunately, credit cards have high interest rates. When credit card payments climb above your ability to pay the minimum monthly payments, you will find yourself in a financial crisis. 

Catastrophic Events

A fire can destroy your home and belongings in minutes. A flood may ruin your furniture, and your home insurance policy may not cover the damage. Tornadoes tear off your roof and change your life instantly. These sorts of events are impossible to predict and prevent. While area charities and the Red Cross may provide initial assistance, you may be mostly on your own for long-term recovery. 

Regardless of the reason that you need to file for bankruptcy, know that you’re not alone. Consult with a lawyer about your options.