Most Common Reasons for Going Bankrupt, Part IFriday, May 22nd, 2015, 3:04 pm
The economic recession, a higher cost of living and general inflation, among a myriad of other factors, have led to a significant increase in the amount of people who find themselves in major debt that they are unable to pay off. Many of those debtors in Brooklyn have found that filing for bankruptcy was the best decision for them and their financial futures.
Michael F. Kanzer & Associates, P.C. Brooklyn bankruptcy attorneys specialize in financial recovery and well-being. In the 25 years since our inception, we have helped more than 500 bankruptcy clients discharge their debts.
Our qualified bankruptcy lawyers are your biggest advocates for overcoming financial adversity. If you need help determining the best course of action to secure your financial future and conquer debt, call us today at 718-769-7200, the consultation is free.
The events or actions that lead to debt vary greatly from person to person, but there are a few reasons that are more common than others. Below, we review some of the top reasons Brooklyn residents go bankrupt.
Cost of medical care.
Investopedia reported that a Harvard University study found that medical expenses account for 62 percent of personal bankruptcies. Surprising, a majority of those who filed for bankruptcy as a result of medical debt were actually insured- 78 percent in fact. The cost of medical care can adversely impact even those who have health insurance, co-pays, uninsured procedures and other things can all lead to debt for the insured, and both the insured and uninsured may be forced to dip into their savings, emergency fund, retirement account and other assets in order to decrease their mounting debt. For some, the debt becomes too much to keep up with and bankruptcy becomes a viable option.
In some cases, the unemployment may be due to a resignation, but the still unstable economic climate has resulted in many Brooklyn residents being unemployed for the long-term due to being terminated or laid off.
Losing your job without another one lined up has the power to financially devastate a family in a very short period of time, especially if the individual or family doesn’t have some funds tucked away to get them through a few months (or longer) of unexpected or expected unemployment. The person may then depend on their credit cards to pay the bills, but with little means of repaying that debt, that move can lead to a worst-case scenario. Also including with job loss is loss of health insurance, which can lead to crushing debt, as we covered earlier.
Category: Bankruptcy Law