Filing for bankruptcy used to carry a stigma of being only for those who mismanaged their money. However, as economic pressures mount and unexpected life situations arise, the need for bankruptcy can arise for anyone and anytime. In fact, research now shows that the majority of bankruptcy filings are brought about through uncontrollable circumstances.
A Harvard Study found that 50.4% of all Chapter 7 filings were brought about because of medical bills since 2001. Over the last ten years, poor medical coverage and unavoidable medical illnesses requiring extensive treatment have pressured many hard working Americans into seeking help with their debts. More recent problems with the economy have brought an increase in filings due to unemployment. Many Americans are now facing difficulty paying their debts and are at risk of foreclosure over lack of adequate employment.
Some of the reasons for bankruptcy filings that have spanned the test of time are divorce, or loss of a spouse, and poor credit accounts. Losing a primary income provider in a family can be financially devastating to even the most money savvy American. Further, the costs associated with death or divorce can be crippling if the family was not financially prepared. Poor credit accounts also play a role in bankruptcy filings. Not mismanaging of funds, but having credit accounts with unfavorable and outrageous terms or conditions. It isn’t uncommon for people to get into bad credit lines early on in life and continue to carry these accounts, with their high interest rates, through adulthood.