While financial irresponsibility is a valid cause of bankruptcy, it is solely the main cause.
Among Auburn & Opelika residents, it is rarely one thing that leads to financial struggles serious enough for bankruptcy. More often, it is a combination of events, such as a job loss in conjunction with an unexpected medical injury.
So, whether you are overwhelmed by financial struggles or trying your best to avoid bankruptcy, whatever the case is, here are the top five reasons residents in Alabama go bankrupt from David S. Clark, an experienced bankruptcy attorney in Opelika, Alabama.
The order of the following list is based primarily on a paper by the American Journal of Public Health.
DISCLAIMER: The following blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.
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1. Loss of Income
As cited by nearly 78% of the survey respondents, loss of income was the most common reason for filing for bankruptcy. Unfortunately, this statistic is far from surprising since over 65% of Americans live paycheck to paycheck.
Income brings stability, so when paychecks stop, financial trouble can be close behind—for example, the failure to pay health insurance payments, car payments, or even mortgage payments. Plus, doctor or hospital visits can be extremely expensive without health insurance.
2. Medical Expenses
In conjunction with the loss of income, medical expenses were the second most popular reason why a person in Auburn or Opelika, Alabama may go bankrupt. This is not a surprise with the expenses that can come from an accident or illness.
Furthermore (and as mentioned), in conjunction with a loss of income, the loss of health insurance can lead to seemingly impossible to pay medical bills.
3. Housing Costs
Home mortgages represent the single most significant portion of household debt in Alabama, far surpassing credit cards or student debt. This is often due to residents taking on mortgages outside of what they can afford, more commonly known as those who are “house broke”.
When someone is house-broke, it means that they’re spending too much of their total monthly income on housing costs such as monthly mortgage payments, property taxes, maintenance, utilities, and insurance. These expenses can quickly add up, leading to difficult financial struggles or bankruptcy as shown by 45% of survey respondents.
4. Living Beyond Your Means
Overspending can come in many shapes and sizes—from maxing out credit cards to simply being unwise with money. Whatever the cause, thankfully there are ways to learn how to budget correctly to avoid bankruptcy.
5. Helping Family Members
Whether helping a child pay off student loan debt or paying off a parent’s mortgage, close to 30% of survey respondents said that assisting their family placed a massive burden on their own finances and became a motivation for bankruptcy.
David S. Clark – Experienced Auburn Bankruptcy Attorney
In conclusion, many circumstances can lead to bankruptcy, but bankruptcy does not mean the end of your finances forever. David S. Clark is an Opelika-based bankruptcy attorney who has helped countless Alabama residents find freedom from the weight of immense debt.
Whether you are seeking to file for Chapter 7 or Chapter 13 bankruptcy, David S. Clark can help you every step of the way. For more information, contact David S. Clark today!
DISCLAIMER: The above blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.