One reason that some people avoid bankruptcy is because they think that their financial situation is their own fault. They blame themselves. They may not want to file for bankruptcy because it makes them feel uncomfortable or they worry that seeking help is a sign of weakness or irresponsibility.
Have you found yourself in this position? An important thing to remember is that bankruptcy is usually not a filer’s fault. It’s the result of things outside of their control, and the bankruptcy process it’s just a legal tool to fix financial issues and give individuals who are struggling a fresh start. Exploring some of the common underlying reasons why people file for bankruptcy can provide helpful clarity in this regard.
Most people budget based on what they expect to spend every month versus how much income they have. But if you’re living paycheck to paycheck, this only works as long as you don’t have unexpected costs. As soon as something happens, it creates a level of debt that you simply can’t afford. But that doesn’t mean your previous budget was mistaken. You can’t predict everything.
Say that you’re injured in a car accident. You need emergency treatment right away, and your insurance only covers so much. You’re not going to put off that treatment or avoid going to the hospital just because of the financial side of your situation. You still need to focus on your health, but this can leave you with debt that you will never be able to afford.
Finally, remember that many people lose their job through no fault of their own. There could be an economic recession, and a company has to downsize. But, once again, your budget is based on projected income. Even if your pay is simply reduced or your hours are cut, that can be enough to make it so that your bills are no longer affordable.
If you do find yourself facing this type of insurmountable debt, it’s quite important for you to look into all of the legal options at your disposal. Bankruptcy may be able to help you move forward successfully.