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Consumer debt in America has hit all-time highs, totaling more than $4 trillion when you factor in credit cards, student loans, and auto financing. With the average household debt so high, the slightest change in circumstances can cause serious financial disruption, easily forcing the most responsible borrowers into bankruptcy. Below are some of the most common reasons Americans may need to seek debt relief.

4 Common Reasons for Bankruptcy Filing

1. Job Loss

A layoff or unexpected wage reduction can throw even the most carefully managed budget into chaos. Even borrowers who can find work after a couple of months may have to file for Chapter 13 protection to make up missed mortgage and auto loan payments.

2. Medical Expenses

bankruptcyMedical emergencies and sudden illnesses can strike at any time, leaving patients with massive debts they can’t repay. Even those who do have medical insurance often have trouble paying copays and meeting their deductibles, which can total thousands of dollars that many people simply don’t have.

3. Filing for Divorce

Getting divorced has significant long-term financial consequences for both parties, including a serious reduction of income and increased expenses. If you’re unable to pay back your share of the marital debts, bankruptcy may be your best option.

4. Credit Card Debt

The average household carries over $15,000 in credit card debt alone, much of which is related to emergency expenditures. Missing just one payment can cause ballooning interest rates and late fees, making it extremely difficult to recover from financial difficulty.

 

Struggling with unmanageable debts can seem like a hopeless situation, but bankruptcy can provide a way out. As one of the top-rated bankruptcy attorneys in the greater Little Rock, AR, area, Bueker Law Firm provides borrowers with the crucial legal guidance they need. Visit their website or call (870) 673-1313 to schedule your free consultation and follow the firm on Facebook for more advice and legal tips.

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