People raised to be hardworking individuals may view bankruptcy as a blemish on their character. The idea that they have to get rid of debt instead of repaying it may seem irresponsible or somehow wrong. Some people hold off on filing bankruptcy far longer than they should because they believe that filing for bankruptcy is a moral failing.
While it is honorable to make every reasonable effort to repay your debt, the truth is that filing for bankruptcy is quite often a result not of irresponsible or unethical behavior but rather simple bad luck. Some of the most common causes of bankruptcy reflect not personal feelings but circumstances largely outside of the control of the person in question.
Medical debt is a major contributor to bankruptcy
Modern medicine is incredible in what is possible for patients. Whether you have recently defeated an aggressive kind of cancer or recovered after suffering a partial spinal cord injury in a car crash, you may feel incredibly grateful to the medical professionals who saved your life and helped you heal.
Unfortunately, that help comes with a high price tag. Medical debt is so common that it is a leading cause of bankruptcy because people incur the debt while they are unable to make payments on it and then can’t regain their financial balance afterward.
Divorce is another common issue leading to bankruptcy
You can’t control the fact that your spouse cheated on you or that you just grew apart once your kids left your house. You also can’t control if your ex decided to be particularly contentious in the divorce, dragging it out for months and drastically increasing the overall cost.
Divorce can cost tens of thousands of dollars just in attorney fees and court expenses, even before you factor in the requirement to divide all of your property with your ex. You may need bankruptcy just to put the past behind you and get on with your life.
Other leading causes of bankruptcy include losing your job and unexpected expenses, which are likely out of your control. You should not feel ashamed about the fact that your debt has reached a point where you can no longer take care of it. Instead, you should focus on how taking action now will help you achieve a more stable financial position in the future.