#5 Natural disasters and other unexpected events
We've had our share of hurricanes and flooding in North Carolina and for those that weren't adequately insured or didn't have coverage for that disaster, the financial consequences were devastating. And you don't have to be a homeowner to be affected by an earthquake, flood, hurricane or fire. Renters can lose everything they own and even if they're insured against the loss of some of their personal property, moving expenses can be burdensome. This can then cause a domino effect of financial problems.
#4 Divorce or breakup of a long-term relationship
Splitting one household into two doubles the living expenses but doesn't change the earnings of those that break up. Mathematically, you can see right away how this can cause problems. Add on top of that legal fees, child support and alimony and it can quickly turn into a money mess. Even if you weren't officially married, it can be just as tough of a financial adjustment when a long-term relationship breaks up, especially if kids and/or joint assets and property are involved.
#3 Uncontrolled spending
For most people, this alone isn't the main driver of bankruptcy, but this one often comes hand in hand with other circumstances. Credit card debt is a main source of the overspending. With a divorce, depression after a split can often lead to overspending. Guilt can also lead parents who've broken up to overdo it with their kids or try and outspend the other parent. A job loss can also lead you run up credit cards for necessities.
#2 Job loss and/or prolonged unemployment
This is a huge driver of financial problems. A job loss of as short as a month can cause significant money problems, especially if you didn't have a safety net. And the longer the unemployment lasts, the worse the financial results. A decline in earnings, if you have to take a lower-paying job after a layoff, can prevent you from recovering but, even if you're able to get a job that pays the same or better as your old one, it can be hard to deal with debt that accumulated while you were jobless.
#1 Medical expenses
This is the big one. A vast majority of our clients that come in to file bankruptcy have medical bills they can't pay and also may have experienced one of the other life events mentioned above. However, a great many bankruptcies are driven primarily by medical bills alone even though about 75% of filers were insured. Copays, high deductibles and hefty out of pocket costs can all contribute to the problem. These are usually associated with a significant medical event like cancer, an accident or prolong illness that also impacts ability to earn.
No matter what has gone wrong in your life that's caused your financial problems, you don't have to live with unmanageable debt, avoiding calls from debt collectors and stressing over money. Life doesn't have to be like that. Call the law offices of John T Orcutt today at (800) 899-1414 to schedule a free consultation with one of our North Carolina bankruptcy experts. We have offices in Raleigh, Fayetteville, Garner, Wilson, Greensboro and Durham.