Medical Cost
A study published in the American Journal of Public Health in 2019 found that 66.5% of bankruptcies in the U.S. were due to medical issues like being unable to pay high bills or due to time lost from work. Even with health insurance, high deductibles and copays, plus job loss, impact Americans.
Rare or serious diseases or injuries can easily result in hundreds of thousands of dollars in medical bills—bills that can quickly wipe out savings and retirement accounts, college education funds, and home equity. This is why supplemental insurance is necessary to help us mitigate the high cost of medical bills.
Once these benefits and resources have been exhausted, bankruptcy may be the only shelter left, regardless of whether the patient or his or her family was able to apply health coverage to a portion of the bill or not. (Find out what you can do to avoid a financial meltdown when there's a medical emergency. Read Steering Clear Of Medical Debt.)
Divorce or Separation
There is such a thing as Common Law Marriage for people who co-habitate without getting legally married but there is no such thing as Common Law Divorce. So, nearly over 750,000 divorces take place each year, in the USA alone. The most popular months for Divorce are between January and March and for people over Fifty years-old Divorce is on the increase. DIY Kits, Lawyers and Court Costs are expensive, even if there are no children involved. LegalShield offers a benefit of reduced attorney hourly rates. Division of property and expenses are not always favorable to one party, especially when there is two homes to support with one income. Often, men find themselves with alimony, childsupport, wage garnishments, and prison for not being able to satisfy divorce judgements.
Job Loss
Technology, Economic trends and Political changes can make certain jobs obsolete. Some job terminations may offer some help with severance packages and state unemployemnet benefits but these are too little and too late for most people in economic risk. According to the Statista Research Department the average unemployment period, in 2020, was 16.5 weeks.
Poor or Exessive Credit Use
Mortgages, Car loans, Credit Cards, and Pay day loans can easily be more that wages can cover.
Financial Planning, Budgeting and Financial Counseling can be measure to help you avoid financial ruin.
Planning and budgeting can helpd you stablish good credit practices and Counseling can help you negotiate better terms.
Unexpected expenses
Insurance provides coverage for Natural Disasters, Accidents, theft, and other cimes but insufficient coverage, deductibles and co-insurance can be financially overwhelming that may required you to file for bankruptcy.
There is no need to fear this expensive legal procedure but for many this will be a way to restructure debt or getting a new start.
