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Unexpected expenses result in the majority of bankruptcy filings

A new report recently published by MarketWatch shows that the number of bankruptcy filings has significantly declined in the past 10 years. In fact, they’ve reached the lowest rate that they’ve been since the Great Recession back in 2008. U.S. Court data reveals why most people are pursuing this type of debt relief.

U.S. Courts data shows that nearly 13 million Americans filed for bankruptcy protection in between October 2005 and September 2017. Most did so after experiencing a significant change in their financial situation.

Many unexpected expenses may result in an individual needing to file for personal bankruptcy. If an individual loses their job, then they may amass debt if it takes longer than they expect for them to land a job. If an individual lacks adequate insurance coverage to pay for emergency medical costs, then they may incur new debt as well. Some individuals even have to do so because they lived beyond their means.

A recent study published by the American Journal of Public Health shows that at least 66.5% of bankruptcies are filed after an individual receives medical care.

That same report shows that 45% percent of all bankruptcy cases are filed because an individual is unable to pay their mortgage or has their home foreclosed on. At least 25.4% do so because they’re struggling to pay off their student loans. Another 24.4% file for bankruptcy following a separation or divorce.

Individuals who have failed businesses or investments may have to file for bankruptcy. Those who receive too little child or spousal support from their ex or who unexpectedly lose their spouse may have to file as well.

Those who live in more expensive areas such as New York City fall behind on bills more quickly than those who live in more moderately priced areas.

It also shows that filing rates among those individuals ages 55 to 74 is quickly increasing. Legal analysts believe that this may have resulted from them co-signing on loans that their children ultimately defaulted on.

If you’ve tried to pay off your debts and have been unable to do so, then a Chapter 7 attorney can help. They can go over your options for resolving your debt woes, and if necessary, aid you in filing for Chapter 7 bankruptcy here in Long Island.

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