231 Law

Valuable Lessons I’ve Learned About Foreclosures

Reasons Why People Become Bankrupt Bankruptcy is a term people hear every so often especially when talking about businesses and enterprises. Nevertheless there are a number of people who do not understand the concept of bankruptcy. Some do not understand the concept of what happens in a bankruptcy court of law. This is usually a process whereby businesses and consumers are given the opportunity if repaying all the debt they might have under protection of a bankruptcy court. Once someone files for bankruptcy, this usually opens their finances to public inspection. There are many reasons why people go bankrupt or file for bankruptcy, in fact some say that it can prevent foreclosure. Here are a few reasons why people may go bankrupt. Divorce and Separation When people divorce it doesn’t always end well financially. Going through a separation or a divorce can be quite a costly affair. This can mean that one or both of the divorcees loses a big amount in terms of assets. It can also mean that you share your partner’s debt in a situation where you had an open joint account.
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Loss of Job
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Job losses tend to quickly result to an extreme reduction in one’s savings and assets. It can also come with extra expenses, which may overwhelm your financial situation. It can be worse if you don’t have a guarantee of restoring your financial position through a job or some other venture. Expenses of Health Research studies show that medical expenses cause 62% of personal bankruptcy. It is very wrong to think that financial catastrophes only happen to uninsured people. According to a study done by Harvard University nearly 72% of those that have filed for bankruptcy have health insurance. Excess Use of Credit A continuous pile up of problems can result to a serious credit debt. Some examples of these problems include emergency expenses, abrupt income reduction as well as illness and disability. People who struggle with poor budgeting and spending in most cases may end up experience credit debt. Student Loans Paying for school can be very expensive for any student. Statistics clearly show that student loans contribute to at least one percent of bankruptcy situations in the United States. In a year this is approximately 15,000 cases. Reduced or Little Income Employees may end up getting affected by salaries going down or budget cuts. Some employees may end up getting reduced bonuses and serious pay cuts whenever companies are cutting down expenses. This can bring about a huge financial strain for those employees working on other businesses and have families to take care of. The end result for such individuals in most cases is bankruptcy. Unexpected Expenses If you are not insured you may end up spending a lot of money if you experience any unexpected catastrophe. The catastrophes maybe due to natural calamities such as earthquakes, tornadoes and floods that may cause extensive loss of property.