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Financial mishaps that can lead to bankruptcy

If you have found yourself struggling to make ends meet, you are not alone. Some of your Louisville neighbors have probably experienced the same kinds of financial hardships. If you are caught in an endless cycle of debt that you can never seem to get ahead of, it might be time to start exploring your options. While debt counseling might be enough to help some people, others need to take more serious measures.

Bankruptcy might be a good option if you are suffering from financial struggles. While many people view bankruptcy as declaring financial failure, it is actually an effective tool to get your finances under control. If you think that your financial troubles are beyond control, you might be wondering how you got to such a point. Here are some common financial mishaps that lead to bankruptcy.

Unexpected medical expenses

One of the biggest reasons why many people find themselves in a financial crisis is due to medical expenses. While it seems like this would mostly affect those without insurance, the majority of people who file for bankruptcy due to unexpected medical expenses actually have some kind of health insurance.

Loss of job

A sudden reduction of income, such as from a job loss, can often lead to bankruptcy. Even people with an emergency fund may not be able to avoid the consequences of such a situation. Many people who suddenly find themselves without a job often rely on credit cards to pay for groceries and utilities while they are job hunting. This often creates the kind of debt cycle that can cause bankruptcy.

Misuse of credit

Some people end up in a bad financial situation because they overspend and build up more debt than they can handle. If you have multiple credit cards, a car loan or a home mortgage, you might find yourself unable to keep up with the minimum payments. If a debt-consolidation loan cannot help you, bankruptcy might be your only option.

If your debt is out of control and you are having trouble keeping up with payments, it is important to remember that there are options. You might qualify to file for bankruptcy and get your finances back on track.

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