As you review your personal finances, you may come to find that you’ve taken on more debt than you would like. Furthermore, there could come a point when you’re unable to make ends meet.
There are many things that can lead to a bankruptcy filing, some of which you can blame on yourself and others that are out of your control.
- Medical debt: Even if you’re feeling healthy today, something could go wrong tomorrow. If you become ill or suffer an injury, it could result in debt that you’re unable to pay. This holds true even if you have quality medical insurance.
- Job loss: Just the same as a medical emergency, you don’t always see this coming. It can sneak up on you at any time, thus making it difficult to pay your bills. Along the same lines, your company could reduce your income, which also affects your finances.
- Credit card debt: As the months turn to years, you add more and more debt to your credit cards. Before you know it, you’re unable to make your minimum payment and creditors are contacting you to find out why.
- Unexpected expenses: You do your best to avoid unexpected expenses, but there’s no guaranteed way of doing so. From a home repair to a sick parent, you never know if an expense will come into your life that you didn’t plan on.
- Budgeting problems: Your budget is meant to keep your finances on track, month after month. However, for many reasons, you could begin to spend more than you earn. Bad budgeting leads to many other problems, such as credit card debt.
These are not the only things that can lead to a bankruptcy filing, but they are common among people who go down this path.
If you come to find that filing for bankruptcy can improve your situation, start by learning more about the process. From there, focus on the pros and cons of both Chapter 7 and Chapter 13.
Once you understand how to file for bankruptcy and what you’re up against, you can move forward with the process. In the end, it’s your hope that you find financial relief and are able to start fresh.