Causes of Personal Bankruptcy

In March of 2007, there were 4,037 bankruptcy filings in the state of Michigan. Only a few years later in March of 2010, there were 7,924. This number is rapidly increasing from year to year, and if you find yourself in a bankruptcy situation, Maxwell Dunn wants to be there to help guide you through it. It makes sense to turn to a solution that will give you a fresh start. Below is helpful information regarding the leading causes of bankruptcy:

One in five American adults will struggle to pay their Medical expenses this year. These bills make up a whopping 42% of all personal bankruptcies and will affect almost two million people this year. Studies show that 78% of those who filed had insurance. Unexpected medical disasters can aid in these large bills piling up, wiping out your savings, and creating an overwhelming situation for you to deal with alone. That’s why there are many relief options to help lift the weight of debt off your shoulders.

Job loss accounts for 22% of bankruptcies. Layoff, termination, and resignation can cause a financial crisis and be devastating to your bank account. Some may receive severance packages, but others aren’t as lucky. As of January 2015, 6.3% of people in Michigan are still not working. Millions of Americans are unemployed, making bankruptcy a valid option because of the high expenses that are being paid for out-of-pocket. Wiping out your debt can help you seek the relief you need and shift your focus on the more important matters at hand.

Uncontrolled spending and an unbalanced budget contributes to 16.5% of all bankruptcies. Credit card bills, large mortgages, and car payments are difficult to stay on top of. Uncontrolled spending habits can force people on a path to filing for bankruptcy. Maxwell Dunn can assist you in creating a reasonable and balanced budget and help you in moving forward.

Legal fees, child support, alimony, divorce, and providing for an entire household causes 8% of all bankruptcy filings. These things can result in overwhelming financial stress which makes bankruptcy a viable solution. In 2012, the divorce rate for Michigan was 6.7%. When divorce strikes a family, it can leave you stuck with marital debt and can put 2 peoples’ debts onto one person. However, there are options to wipe out much of the marital debts.

Home foreclosure can trigger bankruptcy because of certain necessities that can be expensive, such as AC/heat and lighting; this makes up 1% of filings. There are different rules regarding foreclosure for companies, and there is a different process to follow. To the effect of some circumstances and with the right timing, it is possible to save your home through bankruptcy relief.

Another major financial stressor is Student Loans. These student loans won’t be eliminated like other unsecured debt, but it may be possible to consolidate student loans with bankruptcy. It is also possible to fight your student loans due to hardship during bankruptcy.
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