The Top 3 Reasons People Filed for Bankruptcy in 2017
In today’s economic climate, it is understandable that many people are forced to file for bankruptcy.
An accumulation of unpaid bills and serious debt often contributes to most financial problems, with the costs of living frequently rising and causing hardship for many. Sometimes other things in life take priority, yet creditors will always demand repayments eventually, so for many people filing for bankruptcy is the only option left.
Those that file for bankruptcy often benefit from doing so in the long run, as it allows them to consolidate debts and repay them in regular installments without the threat of debt collection, as debt collectors cannot pursue people that file for bankruptcy.
Because of this, many people opted to file bankruptcy in the past year. Let’s look at some of the main reasons people filed for bankruptcy in 2017:
1. Medical Expenses
One of the leading reasons that people file for bankruptcy is due to unforeseen medical expenses. Many of these people had some form of health insurance yet could still not afford to keep up with payments for medical treatments.
A study by Harvard University highlighted this fact several years ago, including the surprising statistic that 78% of the people that filed had medical insurance yet still couldn’t afford to pay their bills. In 2017, the issue remains the leading cause of debt that leads to bankruptcy.
2. Job Loss
In September 2017, the US economy suffered sustained job losses for the first time in almost seven years, mainly due to the damaging effects of the hurricanes that hit Texas, Florida and nearby locations.
This highlights one of the leading causes that people file for bankruptcy every year – job loss. The loss of income, be it from termination, resignation or otherwise, means that savings are quickly eaten into.
Those without emergency funds may find themselves quickly in debt, with many using credit cards to pay for overdue bills. As a temporary measure, this only is only sustainable for so long before creditors come calling unless regular employment can be found.
3. Poor Financial Management
Unfortunately, many causes of debt are self-inflicted, with many forcing to file for bankruptcy because of their poor financial management. For example, spending excessively without sufficiently repaying credit cards can quickly lead to financial woe.
Many people get overwhelmed by various loan payments too, struggling to repay the minimal amount for each form of debt. When no other options are available (e.g. loan from a friend, debt consolidating etc.), then bankruptcy is the only choice many are left with.
The Travis Law Firm provides professional legal representation for Chapter 7 & Chapter 13 bankruptcy services for residents of all cities in Riverside and San Bernardino Counties. We have offices in Riverside, San Bernardino, Victorville, Temecula, Cathedral City and Ontario for the convenience of our Inland Empire, High Desert, and Coachella Valley clients. For more information about our bankruptcy law services and other legal representation, call us today at 1-800-BANKRUPT or (951) 274-9501.