Common Reasons Why People Declare Bankruptcy

by San Antonio Attorney

1. Medical Expenses

Serious diseases or injuries often lead to a high amount of medical expenses – these can easily use up retirement and savings accounts, home equity and college funds.  Once funds have been depleted, bankruptcy may be the final resort, even if the patient was able to put on health coverage to a part of the bill.

2. Job Loss

Loss of income is devastating.  Some are fortunate enough to get severance packages, but there are those who get pink slips without prior notice.  Being financially unprepared only worsens this predicament, and charging expenses to credit cards can be burdensome.

3. Overspending with Credit Cards

Some individuals just cannot control their spending. Installment debt, credit card bills, installment debt, house and other loan payments can inevitably get out of hand, until eventually the borrower can no longer afford even the minimum required payments.

4. Divorce, Legal Separation, and Annulment

Marriage dissolutions cause a lot of financial stress on both partners in various ways.  First are the legal costs, which can be expensive sometimes, then a split of marital assets, child support/ spousal support decree, and lastly the continuing cost of maintaining two households.  The legal fees alone cause some individuals to go bankrupt, while wage garnishments to pay child support or alimony can prevent some to keep up with their bill payments.

5. Unexpected Expenses

Extreme losses from natural calamity, causality or theft for which the owner is not covered with insurance can push some into bankruptcy.  Not all homeowners know that they have to get separate insurance for certain disasters like earthquakes.  People who do not have policy for this type of risk may confront losing not only their house but their personal belongings as well.

There are many reasons why individuals file for bankruptcy.  Those who are considering this possibility should seek advice from a San Antonio Bankruptcy attorney before deciding on this process.

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