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A Look at the Leading Causes of Consumer Bankruptcies

Last updated 1 year ago

More than one million people filed for bankruptcy between March 2011 and March 2012. Though everyone’s situation is different, most bankruptcies can be attributed to one or more of the following causes.

Medical Bills

Medical bills are a major contributing factor to a majority of consumer bankruptcies, even among Americans with health insurance. A single serious illness or hospital stay can result in thousands of dollars in medical bills, and most Americans cannot pay them. Chronic illnesses requiring frequent doctor’s visits or prescription drugs can also add up to a major financial burden.

Foreclosure

Since the collapse of the housing market, many Americans have found themselves saddled with mortgage payments they simply cannot afford, leaving them facing foreclosure. Chapter 13 bankruptcy can help homeowners catch up on missed payments and negotiate a loan modification agreement that will allow them to meet their payments and keep their homes.

Unemployment

The loss of income is a major cause of financial hardship and eventually bankruptcy. Without an income, families must live off of their savings, which can only last so long. Eventually, many are left with no choice but to file for bankruptcy. This is especially true in the present economy, with its high unemployment rate and unusually long duration of unemployment.

Divorce

After a divorce, income that once supported one household must now support two, and this can cause serious financial difficulties for both spouses. Neither one may be able to afford the house on their own, forcing them into foreclosure-and both may accrue new debt that they will be unable to pay.

If you’re facing financial stress and considering bankruptcy, let Golden State Law Group help you through this difficult time. We know that you’re already under enough stress, so we strive to make our services affordable. We also offer payment plans for your convenience. To schedule an appointment in our San Diego office, call (619) 234-3333 today.

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