What Triggers Personal Bankruptcy – Knowing the Signs
Despite efforts of educating people on money and debt management to resolve financial woes, individuals continue to file personal bankruptcies. Piling credit card debts can’t be solely blamed for this as you will soon learn there are several trigger signs to personal bankruptcy.
Medical Bills – The Biggest Cause of Personal Bankruptcy
Yes, you read it right. Unprecedented and soaring medical expenses afflict some 62 percent of filers. Thanks to the rising costs of hospitals, doctors’ fees and medicine, we’ve seen a dramatic increase in personal bankruptcies. What’s even more surprising is that 78 percent of the filers are insured, which means that having health insurance is no guarantee for avoiding medical-related bankruptcies.
Unemployment Woes Increase Filings
This is an obvious trigger. When a person losses a job or source of income, whether its because of termination or resignation, that person becomes part of the unemployed or the financial dependent population. Unless the unemployed bounces back by setting up a profitable business or getting hired again, this financial dependency largely leads to money problems and then to personal bankruptcy.
Poor Credit Management Triggers Bankruptcy
Uncontrollable spending and reliance on credit cards are surefire way to bankruptcy. Living within one’s means and looking for opportunities to save and invest should tackle this issue. However, this is easier said than done. Many people are still addicted to overspending and credit cards.
Marital Dissolution – A Reason to Go Bankrupt
Studies show that divorce and separation puts a great financial strain on both of partners. In the same way, many marriage conflicts begin with financial instability and money-related concerns. This vicious cycle needs to be addressed if people want to retain a happy, healthy marriage, if not financial freedom after separation.
Unexpected Expenses and Force Majeure
Sometimes, individuals are just unprepared for the worst in that when tremendous financial challenges come their way, they can’t do anything but go bankrupt. Sudden deaths or terminal diseases can greatly affect the finances of a person or family. Natural catastrophes and thefts also pose financial strains on someone with little buffer for such unexpected losses.
In all of these, financial preparedness and proper money management are keys to avoid falling into the trappings of personal bankruptcy.