Unexpected events often lead to bankruptcy

On Behalf of | Oct 5, 2023 | Bankruptcy

People sometimes believe that bankruptcy stems from intentional actions. And it can. Someone who intentionally overspends on a credit card may find themselves facing overwhelming debt. Someone who takes out a loan that they know they can’t afford may later have to come to terms with that loan.

But this is not what happens in most cases. Generally speaking, people face bankruptcy because of unexpected events that are outside of their control. There’s nothing they could have done to prevent them. These are just things that have happened to them, and bankruptcy is a legal tool that they can use to get their finances straightened out after it occurs.

Medical expenses

For example, medical expenses are often cited as one of the top reasons for bankruptcy. It is certainly true that part of the reason for this is that medical care is expensive. The United States does not yet have universal healthcare, and many people who have insurance still have to pay an incredible amount of money for things like procedures that are outside of that insurance coverage, treatment from doctors and nurses who are outside of their insurance network, and the like.

But if someone has an urgent medical need – or if their child does – they are not going to take the time to carefully consider whether or not it is financially responsible and prudent. They’re just going to get the medical care and then try to sort the finances out later. That is actually why they have this overwhelming debt.

It is often these types of unexpected issues that cause people to consider filing for bankruptcy. Anyone in this position needs to know what legal steps to take.