The US saw 370,685 cases of personal bankruptcy being filed nationwide in 2022. This can come across as negative information on the credit report. Lenders might not consider you credible to offer a loan or simply charge higher interest than usual. The loan terms may not be favorable as well. Bankruptcy crops up from unavoidable situations. But the good news is that it is completely possible to come out of this monetary distress.
The Great Recession of 2007-2009 had ‘sparked a wave of bankruptcies.’ Some were even greater than the US court had ever witnessed. In January 2023, the World Bank warned that the global economy is once again dangerously close to slipping into a recession. You must understand that health insurance cannot protect your finances. So, it is a good idea to learn about the several factors that can combine to lead to bankruptcy and take proper precautions accordingly to stay afloat. Read on.
Loss of Employment
This is the most common reason since job loss quickly depletes savings. Studies have found that 60% of Americans are living paycheck to paycheck in 2023. Job loss at this point could be quite perilous. Losing your income source can also be risky if you do not have a safety net like an emergency bucket or insurance in place. If you find yourself missing big payments or skipping bills every month, consider bankruptcy right away. This could be the most effective step if you do not see a forthcoming cash inflow.
This accounts for roughly 62% of personal bankruptcies in the US as per a survey conducted by Harvard University. A treatment that is not covered by your health insurance can cost you thousands of dollars that you may not have anticipated ahead of time. This can imbalance your monthly budget if you are incapable of meeting extra obligations than the usual ones. Work with a bankruptcy lawyer in New Jersey to avoid overwhelming debt.
High Credit Balance
Not all credit bills are due to irresponsible spending! You might have incurred a high balance due to the above-discussed points. A change in financial assistance, home mortgages or business strains can also increase your debt responsibilities.
Collection agents might start harassing you if the bills are not cleared along with implementing a hefty late payment fee, compounding the problem.. This can lead to bankruptcy and talking to a trusted lawyer is the best thing you can do. We will analyze your situation and discuss every possible option to come to a viable solution.
Foreclosure filings stood at 324,237 US properties in 2022 which is up by 115% from 2021. This is a typical reason why more than 1% of Americans file bankruptcy. Lenders often tend to approve a bigger loan than the borrower can afford to pay. This can ultimately lead to falling into a debt trap. Fret not! A good attorney can explore even out-of-court options with you to pull you out of this horrifying situation.
Debt does not disappear on its own. But remember that bankruptcy is a fresh start rather than a failure! Get in touch with an experienced professional who can offer robust legal representation and effective tools to offer relief.