Bankruptcies are increasing at an alarming rate in the United States. More than 1.5 million people file for bankruptcy every year according to US bankruptcy court statistics. Shocking isn’t it?! And what’s more, nearly 97% of these bankruptcies are made by individuals, not by businesses.
So what are the top reasons why people go bankrupt?
The stock market can be unpredictable at the best of times. And it can be a little like going to the casino whereas you get very addicted to the making easy money part and when you lose some you feel like you need to win it back. This can be a very downwards spiral and can often lead to bankruptcy. It may be a good idea to set aside some money for the stock market (if you are already planning do playing the market) and if you lose it, don’t go dipping into your savings. Keep in control and do your research.
In the United States, the number one reason why people go bankrupt is because of medical expenses. Most of these cases are unexpected medical expenses from people falling ill and not having the right medical insurance. These are very sad cases as people are going through possibly the most difficult time of their life and if they get through it, they then have so much debt that they go bankrupt. Other medical reasons are that people may be impulsive and decide to get surgery done to lose the extra pounds to become slim, or even cosmetic surgery to look better. These surgeries often end up being more expensive then the patients realize which leads to major money issues.
The job market can be very up or down. At times, it seems like there are thousands of jobs available and you get offers thrown at you. And other times there seems to be nothing at all available and if you lost your current job, you would be in trouble. And that is exactly what happens. The job market is very slow, and you lose your job. You cannot pay for your mortgage or bills and end up going bankrupt. Always have a plan b and have some savings ready for this situation (at least to get you through a few months to a year).
Divorce is a very emotional time in your life if you are unlucky enough to go through it. But it can also be very expensive. They are expensive even if you don’t count lawyer fees. But if lawyers get involved, they may end up taking you to the cleaners and both you and your ex may end up bankrupt. Or perhaps one party does much better than the other. It can be a very messy time in your life.