Why People File for Bankruptcy

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Written By: Bankruptcy Attorney Alex Hernandez

According to a new report by Business Insider, medical bills continue to be a top reason why people file for bankruptcy.

There were more than 12.8 million consumer bankruptcy petitions filed between the time period of October 2005 to September 2017. Bankruptcy occurs for many reasons such as loss of a job, lower wages, and of course, emergency medical bills.

One report by Lorie Konish for CNBC, citing a study by the American Journal of Public Health, concluded that 66.5% of all bankruptcies are related to medical issues whether the high cost of the bills or missed time from work because of an illness.

My personal experience is that a high percentage of my bankruptcy clients do have medical bills listed as debts and easily 50% of my clients file for bankruptcy because of medical bills.

According to the study, other reasons people file for bankruptcy includes:

  1. unaffordable mortgages or foreclosure (45%);
  2. spending or living beyond one’s means (44.4%);
  3. providing help to friends or relatives (28.4%);
  4. student loans (25.4%), and
  5. divorce or separation (24.4%).

A study by the Consumer Bankruptcy Project and cited by Tara Siegel Bernard for The New York Times, age is also a factor. Between 1991 to 2016, bankruptcy cases have declined for those between the ages of 18 to 54, but has increased for those 55 to 74.

To make an appointment with experienced bankruptcy law attorney Alex Hernandez, call or text the phone numbers below.

Alexander Hernandez

Alexander Hernandez represents clients in the areas of Chapter 7 Bankruptcy, Family Law/Divorce, and car and motorcycle accidents. (904) 712-5565 or (305)-688-LAWS (5297).

Comments and opinions always welcomed

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