Why do consumer debtors file Chapter 7 or Chapter 13 bankruptcy protection? If you think the answer is financial irresponsibility, compulsive spending, or even insolvency, you’d be wrong in more cases than not. The biggest driver of personal bankruptcy is the unexpected: unplanned job loss, unanticipated illness, and rapidly deteriorating relationships when end in divorce.
Unemployment isn’t like it used to be. Since the financial crisis of 2008, more Americans have experienced periods of unemployment than at any time in the nation’s history. In 2012, the Bureau of Labor Statistics announced that 5.2 million Americans had been unemployed for longer than six months. Moreover, finding jobs for which you’re qualified is tougher than normal. In fact, things have been so different from what used to be “normal” for so long that a new term has developed: the new normal.
Even if you have a job now, prolonged unemployment can have a lasting legacy. Accumulated debts, particularly on high-interest financial vehicles such as credit cards or payday loans, may grow even as you make the payments you can. Like standing in quicksand, you may feel like you’re sinking further and further into debt. If this sounds like you, it may be time to throw up your hands, exercise your rights, and declare bankruptcy.
Likewise, medical bills can be similarly crushing. Over the last several years, real wages have remained relatively stagnant while medical costs have risen steadily. In 2010, for instance, Americans spent $2.6 trillion on health care, up from a mere $256 billion just thirty years prior. Costs have gotten so high that the Center for Disease Control has estimated that in 2011 20 percent of American families missed payments on their health care debts. If this starts to happen, bankruptcy may be the necessary evil you need.
When is the right time to take the plunge and declare personal bankruptcy? It’s hard to know. Fortunately, the attorneys at Fears Nachawati can help you answer this important question. Moreover, if you conclude that it’s time to get started making your way through bankruptcy and toward a new financial life, we can help you get started immediately. Your free consultation is just a phone call or email away. Contact us today.