People sometimes have a negative opinion of bankruptcy, and it tends to stem from an idea that the person who is filing for bankruptcy is responsible for that financial position. They are blamed for making mistakes or poor decisions. They are told that it is their fault that they can’t afford their debt in the first place.
This makes it feel like bankruptcy is easily avoidable if you just make the right choices. But is that true? You will find that quite the opposite is actually true, and many people have no say at all in whether or not they declare bankruptcy.
A top reason is medical debt
To start with, one of the top reasons for bankruptcy in the United States is debt from medical bills. It’s safe to say that no one chooses this type of debt. They may have been injured, they may have been diagnosed with a serious disease or something of that nature. They feel like they have no option but to get the medical treatment, even if they cannot afford it on their current budget.
On top of that, the medical system in the United States is incredibly expensive. Even those with insurance may have to pay thousands of dollars just to meet their deductible. Those who don’t have insurance that covers all of their costs may think that they have a comprehensive policy, only to find out that they still have overwhelming debt even with insurance.
Moreover, healthcare insurance is often connected to employment in the U.S. Someone who loses their job may lose their healthcare benefits at the same time. If they are then injured or become ill, they not only don’t have an income, but they have no financial safety net because their insurance is gone. Almost overnight, they can go from feeling like they are making wise financial decisions on a budget to looking at so much debt that they will never be able to pay it all off.
What are your options?
As you can see, bankruptcy is often completely unavoidable. In a case like this, the best option is simply to look into all of the solutions to address it.