You may have a negative view of bankruptcy and are wondering how you could find yourself in that situation. It is essential to understand that many circumstances could lead to you filing for bankruptcy.
Here are four typical reasons you might need to file for bankruptcy.
Issues with credit
Credit cards can make it easy for you to spend above your means. However, if you cannot make your minimum payments, you may need to file for bankruptcy.
Loss of job
If you lose your job, you might find yourself unable to pay your bills even if you keep emergency savings. Your financial situation could also worsen if you cannot find a new position quickly. As a result, your unemployment could lead to bankruptcy.
Costs of divorce
The legal costs involved with getting a divorce can strain your finances. Your financial burden becomes even more significant if you must also pay child support and alimony costs.
Support payments stemming from a divorce can cause financial stress whether you are paying or receiving payment. If you cannot make your payments or your former spouse cannot make payments to you for your bills, both situations could lead to filing for bankruptcy.
Costs of medical treatment
If you become seriously injured or sick and cannot pay your medical bills, you may start considering bankruptcy. Medical debt is the leading reason you might file for bankruptcy.
Bankruptcy does not mean your financial health is irreparable. Regardless of your reason for filing bankruptcy, you can rebuild your credit through consistent bill payments over time.