Bankruptcy is not usually a product of poor financial decisions. It is something that happens because of events that are out of someone’s control.
Two of the most common examples are job loss and medical expenses. When you get fired without warning and lose your income, your debt may suddenly become unaffordable. When you get injured or you get sick and you suddenly have mounting medical bills, you may have no way to cover them — even if you have insurance and even if you have been carefully saving for years.
These issues are coming to the forefront as the unemployment rate in the United States continues to rise. Reports show that, in the last few months, about 41 million individuals have been forced to file for unemployment. It was actually over 41 million at the time of that report and it’s unclear when that increase will end.
A central question, then, is how this is going to impact bankruptcy filings in the coming year. How many people will get jobs again? How many will be able to cover their debt with unemployment benefits? And how many are going to find that they suddenly, through no fault of their own, have no way to support their lifestyle any longer? These individuals may find that the only way to deal with their debt is to use bankruptcy as a tool to remove it and get a fresh start in this new reality.
If you are among that number, it’s important to understand all of the options you have at your disposal for a new financial start and how to get started.