For consumers in Kentucky, the attitude is often that only irresponsible spending can lead to bankruptcy. What many do not realize is that there are things outside of a person’s control that can lead to overwhelming debt and smothering calls and letters from creditors. According to CNBC, many consumers may be surprised to find out not only the main reason that people file for bankruptcy, but how quickly it can happen to them.
A recent study showed that 66.5% of bankruptcies were tied to some type of medical debt. Surprisingly, many of those people had health insurance but found that they were unable to pay the remainder of their medical bills or for things the insurance company did not cover. High medical costs can come from unexpected illnesses or injuries and from the time off work that is caused by an injury or illness. Researchers found that over half a million families file for bankruptcy because of issues with medical bills each year.
Investopedia delves further into the reasons that people file for bankruptcy. After medical expenses comes the following:
- Job loss
- Excess or poor use of credit
- Separation or divorce
- Unexpected expenses such as natural disasters or loss of property from theft
At the end of the day, the problem is that many people have more money going out than they have coming in. Fortunately, there are options available to help those who are struggling to stay up to date on their payments. Credit counseling and debt repayment plans are two options, but many consumers find value in filing for bankruptcy and starting fresh. A bankruptcy attorney can help an individual or family through the legal process of filing for bankruptcy.