The Truth behind the Causes of Bankruptcy

It is undeniable that there is a persistent social bias against bankruptcy even as more and more people are being pushed to the brink of a financial crisis through no fault of their own. “Bankrupts” are “lazy,” “spendthrifts,” “irresponsible,” or “foolish.” While these may describe some people who file for bankruptcy, it is by no means the norm. Here are some numbers about what causes bankruptcy that may make you think again.

Medical Expenses

More than 40% of bankruptcy filings in the US are due to unexpected or excessively large medical expenses. This could be as a result of an accident, birth injury or defects, sudden illness, or complications arising from medical treatment or surgery. Prior to that, many were gainfully employed, properly insured (nearly 80% of those who filed had medical insurance), had good credit scores, and did not have a heavy debt load.

Unemployment

About a quarter of all bankruptcy filings are due in part ort primarily from unemployment. Many of these people have been working all their lives when they were suddenly laid off or the company closed, and now have difficulty competing with younger candidates for a few jobs. Many have no savings because they thought they had financial security, or what savings they had is all gone.

Major Disasters

Seven percent of those seeking financial relief through bankruptcy were victims of some disaster such as fires, earthquakes, tornadoes, or hurricanes. They were wiped out and many had homeowners insurance which unfortunately did not cover the relevant incident.

There are certain things that will have a profound impact on you that you simply cannot control, and all you can do is try to start fresh. This is what bankruptcy can help with as discussed at length on http://centraltexasbankruptcy.com/. For more information about how bankruptcy can help you get financial relief, consult with an experienced bankruptcy lawyer in your state.

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