3 Things that Can Make You File a Petition for Bankruptcy

There are a number of situations that can make an individual file a petition for bankruptcy protection. It could be due to the loss of a job, extreme hardship or even medical bills.

Medical Bills

You can probably find case after case where individuals have filed bankruptcy due to medical bills. If you have to have a surgery done or some other medical procedure and you don't have any health insurance then the amount of medical bills you accumulate can be devastating. When the debt load is somewhere in the area of $40,000 to $70,000 you can almost rest assured that these will never get paid. In situations such as this a person is left with no choice except to file a petition for bankruptcy. Even if you make arrangements with your creditors to pay monthly payments it will take you several life times to wipe out this kind of debt. Whenever people are faced with a mounting debt load, medical bills are the first ones that don't get paid.

Excessive spending

If you spend excessively and have no regard for a budget then you will eventually get to the point where you need to file for bankruptcy protection. Making credit card purchases a way of life is a recipe for disaster. Some people do this out of habit. As soon as they start using credit cards it eventually becomes a bad habit and people will continue with this without even thinking about it. A lot of people are programmed to make only their minimum payment and this further exasperates the problem. A minimum payment will keep you in debt a lot longer and it causes you to pay more in finance charges.

You can guard against excessive spending by setting up a budget and stop with the credit card use except in extreme emergencies. If you accumulate a credit card balance try to pay it off when your statement arrives. At the very least you want to make sure that you are paying more than your minimum monthly payment every month.

Loss of job

Right now as you can well imagine many people are losing their jobs all over the country. When there is no job a lot of people will file for unemployment. Unfortunately unemployment is not nearly enough to help people meet their day to day living expenses. Some of the bills will have to go unpaid. People start prioritizing the debts when they lose their jobs. The first thing that gets paid is the rent or mortgage payment, then food and utilities and from there it's a scramble to see who gets paid. One may even employ the bill in a box method. You list each one of your creditors on a separate piece of paper and then put them in a box and pick one after your important bills have been paid.