Falling Victim to Personal Bankruptcy: Leading Causes and What to Do When it Happens to You

Posted on in Personal Bankruptcy

Cook County bankruptcy, personal bankruptcyEvery year, countless people fall victim to personal bankruptcy for a number of reasons, but regardless of the cause, one thing is certain: No one intends to go bankrupt. Ultimately, the decision to file for bankruptcy is a choice, but it is never a fun one to make, especially when you never saw it coming.

Driving Factors

Usually sought after as a last resort to address overwhelming financial deterioration, bankruptcy is a helpful tool for those requiring a fresh slate, although it is not a process to take lightly, as it comes with a myriad of consequences. Destroyed credit is typically the most damaging consequence of filing, which can—and should—cause individuals to think twice before making the call to file. Those on the cusp of declaring bankruptcy often find themselves in such a position due to the following factors:

  • No Cushion — Whether you live dollar to dollar and paycheck to paycheck like many Americans, or simply neglect to work a savings plan into your monthly budget, you are not alone when it comes to experiencing a lack in financial cushion. The problem with having no cushion is you have no room for emergencies or unexpected expenses, and when they strike, even a few hundred dollars can easily set you months back on your bills. This is often a catalyst for opening new lines of credit and taking out new loans, which temporarily compensates for those unexpected expenses. Yet it quickly becomes another pile of debt that you cannot pay back.
  • Divorce and Other Unexpected Life Changes — Changes like divorce and death in the family can severely alter your financial standing and can easily drain your funds, especially when you have no savings set aside to account for such large expenses. Sadly, many people are forced to file for bankruptcy when these events take place, placing them in a position where they have to start from scratch, now with bad credit as a hinderance.
  • Overspending — Neglecting to create or practice a well-planned budget can quickly lead to overspending, causing a mountain of debts and financial obligations that simply cannot be met. Whether you are spending more than you make in a month, have made a habit of relying on credit, or are struggling to make even the minimum payments on your debts, you are already in a sticky situation.

When it Happens to You

Sometimes, bad things happen to good people. Even the most financially responsible individuals can find themselves needing to declare bankruptcy. Whether you are just now coming to terms with your poor financial standing or are concerned trouble might be on the horizon, the moment you are faced with the possibility of bankruptcy it is imperative you speak with a knowledgeable Cook County bankruptcy attorney who can advise and direct you to ensure you take a course of action that is in your best interest. Filing is never a desirable path, but it does not mean permanent failure or ruin—your financial future can still be bright. Call the Law Offices of Eric G. Zelazny today at 708-888-2299 for a personal consultation.

Source:

http://www.forbes.com/2010/03/25/why-people-go-bankrupt-personal-finance-bankruptcy.html

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