There are so many reasons why people find themselves working on bankruptcy preparation. We want to pretend that bankruptcy doesn't happen, but the reality is that it's more common than it seems. Individuals file for bankruptcy on a regular basis; businesses file for bankruptcy because business owners have no other choice. Filing for bankruptcy can, in the long term, be a good thing. Chapter 7 bankruptcy, for example, allows the filer to have their debts discharged within 90 days, according to Gadebtrelief.org. Below, let's look into some of the reasons why people file for bankruptcy.

1. Lost Employment

Unfortunately, many people file for bankruptcy because they lost their jobs, and are either unable to find a new job, or are unable to find a new job that pays them equivalently. The job market is incredibly competitive, and there is no guarantee that you will find a new job after losing one, and you may have to take a significant pay cut when taking a new position. This can result in people being unable to pay their debts, forcing them to file for bankruptcy.

2. Divorce

Divorce is quite expensive, with many people finding their savings completely depleted by the process. The longer and more argumentative the divorce, quite often the more expensive it becomes. People often file for bankruptcy after a divorce, especially if they are left paying their ex a significant sum.

3. Medical Crises

The healthcare system isn't always set up to be affordable, especially if you don't have health insurance. A serious illness or injury could completely ruin an individual's finances. While medical debt can sometimes be negotiated, at times it's so insurmountable that people find themselves working on bankruptcy preparation.

4. Addictions

Sadly, addiction often leads people to bankruptcy preparation. Addiction is quite expensive; even once people begin to recover from addiction, that in itself is expensive — especially when recovering addicts utilize rehab. Ultimately, this can result in addicts, recovering or other, filing for bankruptcy.

Again, filing for bankruptcy can be emotionally devastating and practically difficult. That being said, you can move forward from filing for bankruptcy. Ultimately, it could be the start of a new life. Reach out to Financial Counseling Center to learn more about what bankruptcy could mean for you.