One of the biggest myths about bankruptcy is that it always happens to people who make financial mistakes. This is true in some cases, due to issues like overspending, using too many credit cards, impulse buying or living above your means. It does happen. But it’s definitely not the only reason for bankruptcy and not even the main one.
The truth is that a lot of people find themselves facing bankruptcy because of things that happen to them or things beyond their control.
For instance, medical bills are a leading cause of bankruptcy. You don’t get to determine if you get sick or get injured in a car accident or suffer through some other unfortunate event. These things happen without warning. Medical care can be incredibly expensive, though, and you may never be able to pay it off.
Another potential reason is job loss. Maybe you have a great job that feels stable and pays you a very nice salary. You buy a house and a car, take out some credit cards, travel the world and enjoy your lifestyle. Then a recession hits, your company has to downsize, and you lose your job. Suddenly your car, home and credit card debt isn’t affordable, but it’s not as if you were irresponsible. Things just changed. You did not know what the future held, but now you have no choice but to react to it.
If you do find yourself facing bankruptcy for these reasons or any others, just make sure you understand the legal steps you need to take and the options you have. There are solutions and you can move forward with financial freedom.