Analysis On How People File Bankruptcy

Bankruptcy is when someone can't afford their debt, and they can't repay it to there creditors. Creditors sometimes try to file a bankruptcy petition on a company, small business, or someone that hasn't paid back loans, so they can get even a portion of what they are owed. Many people file bankruptcy from not being able to pay medical bills. Others file bankruptcy by taking out a mortgage on their house. Many people go bankrupt every year in America. No one wants to file for insolvency, but sometimes there's no other options on the table.

Medical expenses is the top reason why people file for insolvency. Sometimes there is an unexpected sickness, and you can't afford the medication. Other times people get involved in car accidents and years down the line they get a letter in the mail saying that the other person sued their insurance company and their policy didn't cover the expenses. Now they are paying out of their pocket for someone else's medical bills. Medical expenses is the number one reason why people file bankruptcy in America. 78% of these people had insurance.

Another huge reason why people go bankrupt is because of unemployment. Many people who lose their job have major expenses that their income takes care of. Some jobs also offer health insurance. When they got fired from their job, their expenses don't go anywhere, they tend to seem worse because now they are paying for them out of their pocket. If they don't have emergency funds, they are more than likely living off of credit cards. This puts people into debt. If they cannot pay off their debt, they have to file for insolvency.

Uncontrolled spending is also a quick way to have uncontrollable debt. Expenses like huge mortgage, and expensive car payments can force insolvency when it is unaffordable. Housing is a huge way how people go bankrupt as well. It is so bad that people are borrowing money to avoid bankruptcy.

Divorce can also lead to insolvency. Divorce is very expensive. Paying for a divorce lawyer, splitting all the funds in half and possibly paying child support. These things can not only lead to just insolvency, but insanity as well. Divorce is very stressful.

Unexpected disasters can cause unexpected bankruptcy as well. It is very hard to prepare for natural disasters. Things like hurricanes, tornadoes, earthquakes and tsunamis can take you by storm. These things are hard to recover from and you lose a lot of valuable goods in the process. This can make people go bankrupt if they don't have full coverage insurance policies.

Some people try to have the latest toys and the fastest cars to try and show off in front of their friends and end up going bankrupt because of ego. This may not be the case for most bankruptcies, but it definitely is how some people go bankrupt. Don't find yourself owing creditors money you can't pay back because you want to be cool in front of friends. Your friends won't pay your debt off for you.

Bankruptcy is something no one wants to take a part of. However, it happens to many people every year. They tend to find themselves in a predicament that they can't get their way out of, so they have to file for insolvency. This can happen to anyone at anytime because going bankrupt usually comes from an unexpected dilemma of some sort.

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