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If you’re considering filing bankruptcy, you may feel bad about yourself. You may feel like you have let yourself down and your family down by not being able to pay your debts. You may worry that other people will find out, you’re likely embarrassed and maybe even ashamed. These are things that we hear all the time from our clients and we reassure them that there’s nothing to be mortified about – sometimes things just get away from us and then bad matters get worse.
Part of the mental obstacle many people have that come into our office is that they have a preconceived notion of who the typical bankruptcy filer is and their perception is negative. They assume that if you file bankruptcy you’re a ne’er do well and don’t take your responsibilities seriously. But this is just not accurate. 99% of people who file for bankruptcy take on debt fully intending to pay it, but it is some major life event that occurs that makes it impossible to fulfill credit obligations.
Here are the most common reasons for filing bankruptcy that can happen to anyone…
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#1 Medical Expenses – Nearly half of bankruptcies are caused by medical debts. If you don’t have insurance (or not enough) and a major medical event occurs, you could end up owing tens of thousands of dollars in medical costs you can’t afford. Just a couple of days’ stay in the hospital can cost $15,000-$20,000. If surgery is required, that total can be $50,000 - $75,000 - $100,000 or more! Even if you’re able to manage your other debts, a single medical event can push you too far into the red.
#2 Unexpected Expenses – Another top reason for bankruptcies is unexpected expenses in general. If your budget is tight, but you’re still getting by and then something crops up, it can instantly shift you from living paycheck to paycheck to being underwater with debt. A major car repair, damage to your home that insurance doesn’t fully cover, illness or death of a family member or anything that taps you out can move you from getting by to considering bankruptcy.
#3 Too Much Credit – We all have credit cards and in the best of all possible worlds, they should be used only for things we can’t pay cash for – like airplane tickets, rental cars and online purchases. Ideally, you should pay off your balance in full every month. But when you lose your job or you or someone in your family falls ill or has a major accident, you may begin tapping your credit lines for necessity. If you then have a hiccup (like #1 or #2 above), together this may just be too much for you to recover from. While some people do abuse their credit, for most it’s a gradual descent into debt that turns bad.
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#4 Job Loss or Pay Cut – You usually take out a mortgage or car loan and take on credit card debt based on your earnings at the time. You may have been just fine if your salary had continued or had grown (as you likely anticipated) but if this is not the case, you may find yourself overwhelmed. If you get laid off, terminated, cut back to part-time or have your salary or hourly wage lowered, your debt load may become overwhelming. If circumstances don’t correct, you may find yourself considering bankruptcy.
If you’re deep in debt with little hope for recovery without help, don’t wait too long before contacting a reputable North Carolina bankruptcy attorney for assistance. Contact the law offices of John T Orcutt for a free consultation to find out if you’re a good candidate for bankruptcy and how we can help. There’s no reason to feel bad because you’re going through a rough patch and need assistance.