More and more people are going bankrupt at an alarming rate in the United States. According to statistics, more than a million people file for bankruptcy every single year. Interestingly, individuals tend to file more than businesses
So what is it that’s making all these people run out of money? Take a look at some of the most common reasons why people go bankrupt.
People who suffer an injury or fall ill and can’t pay their medical bills can find themselves in a mountain of debt. The more that they let time pass, the more that the bills pile up, snowballing into an unmanageable amount of medical expenses.
Even with insurance, paying for medical care is incredibly expensive in the United States. For this reason, it’s a hot debate amongst opposing political parties. Many people believe that universal healthcare should be a basic human right, while others disagree.
The typical American has an average of $10,000 of debt, which doesn’t include home loans or car loans. When a person’s income suddenly comes to a stop, and they’re no longer able to make their payments, it can quickly start to deplete their resources.
Even with savings, losing your income can be detrimental. In some cases, people aren’t able to find work quickly enough and wind up losing everything as a result.
Divorce can be ugly. Beyond having to pay for lawyers, one or both spouses may find themselves losing a considerable amount of assets. They may be ordered to pay child support that makes it impossible to pay their bills, and as a result, they’re forced to file for bankruptcy.
Statistics show that a significant amount of bankruptcies are attributed to students who can’t pay off their loans. After spending years to be able to get the job of their dreams, they find themselves unemployed with an insurmountable amount of debt.
Sadly, many people aren’t able to make payments on their homes, and in order to avoid the bank repossessing their house, they file for bankruptcy. Unfortunately, while it may be a temporary solution, in many cases, it ends up making things worse down the line.
Credit Card Debt
Unfortunately, many people rely on their credit cards to get themselves through tough times like job loss or illness only to find that they can’t pay it back. Although credit cards may be an excellent temporary solution for paying off bills and putting food on the table, ultimately, it can lead to disasters like bankruptcy.
Ultimately, even though bankruptcy may provide a seemingly sensible solution when you can’t pay your bills, other people argue that consolidating your debts and working hard is a better long term solution.