Why Do People File For Bankruptcy?

The perception perpetuated in the media and in our society is that only deadbeats file for bankruptcy.  Many people believe that you’re a bad person if you file because you’re just trying to get out of your debt and give your creditors the short end of the stick. 

That is simply not true. 

Many people who have filed for bankruptcy are good people.  They do not want to file, however they find themselves doing so for reasons out of their control. 

The number one reason people file for bankruptcy is due to a reduction in income.  People get laid off and have difficulty finding work, or replacing their previous salary.  A divorce or loss of a loved one can also cause you to be unable to fulfill your financial responsibilities. 

Be realistic - how many people nowadays can say that we have six months to a year of savings set aside?  It’s simply not the standard means of operation in our culture.  Many people get their paycheck and the spend it entirely on their mortgage, their car, their living expenses and then find there’s nothing left over for savings. 

Have you ever asked yourself this question, If I lost my job and was unable to find another job for three months, would I be okay?  Would I be able to pay for my car and my house and keep up with my debt?  

For many people the answer would be no.  Many of us are closer than we think to filing for bankruptcy, so be careful how you judge.