What Are Common Causes of Bankruptcy?
Bankruptcy Comes From Unavoidable Circumstances
At Joseph P. Doyle, our Chicago bankruptcy lawyer, strongly believes you can fix your financial situation with our legal assistance. Bankruptcy is a solution that can eliminate a large portion of one's debt, no matter what the cause. Below, our firm has explained the most common causes of bankruptcy in more detail.
Every day, thousands file for bankruptcy to get out of a serious debt problem they are facing. This is the result of a serious issue that is affecting bank individual's bank accounts and lives. This is not just a circumstance that occurs without cause. It comes from an unavoidable circumstance or as a consequence of an action. Whatever the reason, bankruptcy, is the primary go-to solution for many whose financial states have gone out of control. There many causes of bankruptcy, but they can all lead to the same solution.
The common causes of bankruptcy include:
- Expensive Medical Bills caused by a disability or illness
- Poor Financial Management related to student loans, purchasing a car or home, etc.
- Reduced income or job loss
- Unexpected emergencies, such as a car breaking down or catastrophic damage to your property
If an unforeseen tragedy has taken place and caused your financial circumstance to become negative, it is important to understand what the initial cause was so that it can be effectively solved.
To learn more about how to recover from severe debt, call (312) 957-8077 to discuss your options.
Reasons Why People Go Bankrupt
Termination of a Marriage
Not only is a divorce personally traumatic, but it can also lead to financial problems. When a household is split, the expenses dramatically increase, and the income is divided. If either party or both individuals are unable to pay their debts, it can be very difficult to control the expenses that arise. Splitting apart the incomes of two is rarely an easy situation and our Chicago bankruptcy attorney can determine if filing is the right solution for you.
Illness and injury are not usually an expected situation. When it comes about, however, it must be handled diligently. Even with substantial health insurance, unexpected medical expenses can quickly get out of control. These situations can be very frustrating for all involved. When taking into consideration the time that must be taken off of work and the loss of income, it is easy to see why a trip to the hospital can result in serious debt trouble.
Mismanagement of Finances
The mismanagement of finances is a cause of bankruptcy that affects many. It is often associated with individuals who have graduated from college and are now using credit without having a clear grasp of the consequences. College loans can cause a problem for young individuals and couples after the grace period has come to a close. Also, decisions to purchase a home or vehicle that cannot be reasonably afforded can damage their financial situation.
Unexpected Job Loss
With the current economy, an unexpected job loss is not an unlikely or rare occurrence. The bankruptcy rate has increased with the rise in unemployment. If a company fails, employees can lose their jobs and leave individuals displaced with large financial obligations that cannot be paid. The loss of a job results in a decreased income and being forced to pay expenses without the proper financial means. If you have been laid off of your job with little to no warning, our Chicago bankruptcy lawyer can help you become debt-free.
What are the Consequences of Bankruptcy?
There are obviously potential consequences when filing bankruptcy. You could lose property or give up possessions to be sold, just to name a couple. Two of the biggest consequences are affecting others financially and damaging your credit.
When you file for bankruptcy, you could negatively affect others. For example, if someone cosigned a loan for you, they can still be responsible for some of the debt.
Bankruptcies affect your credit as they are considered negative. It could make getting future loans more difficult and even result in worse loan terms and higher interest rates.
Contact Attorney Joseph P. Doyle (312) 957-8077 for a Free Review
It is important to contact an attorney to begin fighting your debt. We know that your personal finances are important to you and we can provide you with compassionate legal assistance. Our firm knows that handling debt and filing for bankruptcy sometimes means that you cannot stop until you obtain a successful result. We know to help you achieve the best outcome available.