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4 common reasons why people file for bankruptcy

When an individual becomes overwhelmed with debt, it can seem impossible to recover. If you have found yourself in this position, you are not alone. Many people in the Rochester area have found themselves struggling to make ends meet due to out-of-control debt. Fortunately, there are options available to help you get your finances back on track.

While credit counseling may be enough for some people to conquer their money troubles, others require more drastic measures. For many, the only way to truly get their finances under control is to file bankruptcy. Here are some of the common reasons why people file for bankruptcy.

Medical emergency

Some people who have faced a medical emergency have watched their savings disappear, seemingly overnight. In many cases, even emptying a savings account is not enough to pay for expensive medical treatments that insurance carriers refuse to cover. This can cause a person to start creating more and more debt.

Layoff

An unexpected job loss can also lead individuals to file for bankruptcy. When people lose their main source of income and have trouble replacing it, mounting debt quickly follows. Without the cash flow to make everyday purchases, you might be tempted to turn to credit cards in the belief that the situation will not last long.

Overspending

You might choose to file for bankruptcy due to the general mismanagement of your money. If you are spending more than you make on a regular basis, you might wake up one day and realize that you cannot easily afford to pay various credit card bills on top of your mortgage.

Divorce

Divorce is also a leading cause of bankruptcy. Without proper planning, a divorce can seriously cost you. First, you may lose half your household income, followed by a significant portion of your assets. In addition, you might have to pay some very high attorneys' fees for the divorce.

If you are facing an overwhelming amount of debt, it is important to remember that you have options. By filing for bankruptcy, you might be able to get your debt restructured so that you can work toward a healthier financial future.

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Peter R. Scribner, Esq | 1110 Park Avenue | Rochester, New York 14610
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