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Debt issues may have you thinking about bankruptcy

On Behalf of | Feb 23, 2021 | Bankruptcy |

You’ve no doubt encountered financial challenges at some point in life. If you’ve gone through various life changes, such as getting married, having children, switching jobs or relocating to a new Indiana residence, your circumstances may have sparked financial distress in one way or another. Perhaps you’ve always been fortunate that you’ve been able to bounce back and get things back on track before they got too out of hand.

There are certain issues that often cause serious financial crises. Overcoming obstacles caused by one or more of these issues may not be so easy; in fact, it may be impossible, thus leading you to search for debt relief options such as bankruptcy. Many people use Chapter 7 or Chapter 13 bankruptcy to resolve financial problems and help restore stability.

Causes of debt that often lead to bankruptcy

Maybe budgeting isn’t one of your strongest skills. If so, you’re definitely not alone in your struggle. Mismanagement of a budget is one of the most common causes of debt throughout the country. In addition to making poor financial decisions, the following list shows other issues that often lead to full-blown financial crises:

  • Divorce, especially after having sacrificed a career to stay home full-time
  • Low-income employment
  • Loss of employment
  • Medical bills
  • Lack of savings
  • Gambling addiction or substance abuse
  • Spending future money

Perhaps you get a new job and base expenditures on what you expect to earn in a given amount of time. If you wind up not earning as much income or needing it for something else, you could wind up with a massive credit card balance that you do not have the means to pay.

Getting a divorce can cause serious financial challenges, especially if you’ve been out of the workforce for a long time. If you or someone in your household has a chronic medical condition or suffered a medical emergency, the bills might start rolling in faster than you can pay them. All of these issues rank high on most lists regarding common causes of financial crisis in Indiana and throughout the country.

Considering bankruptcy as a viable option

You may have heard some negative things about bankruptcy, which causes you to hesitate when it comes it considering it as a debt relief option. Then again, perhaps you know someone who was able to pay off their mortgage, save their home and build their credit back up after filing for bankruptcy.

If you’re considering filing for bankruptcy, it’s best to research state laws ahead of time. Since there are numerous types of bankruptcy, it’s critical that you understand the basics of each so that you can determine a best course of action to fit your needs and help you achieve your ultimate financial goals.