For many, the possibility of going bankrupt can feel like a world away. Sadly, with today’s current
financial climate, things can change in a heartbeat and before you know it you and your family could
be plunged into a financial quandary and be facing bankruptcy.
It’s a frightening thought. But losing control of your finances is incredibly common. This is why
recognizing the signs and the reasons behind bankruptcy is important. Wondering what happens
when you declare bankruptcy? Click the link to find out more. Here we’ll explore some eye-opening
reasons why people declare themselves bankrupt. The reasons may surprise you!
You’ve been injured in an accident
It doesn’t take much for life to be turned upside down. What starts as a seemingly average day could
soon spiral into a complete nightmare. Finding yourself involved in a car accident for example or
slipping on a wet floor in a supermarket and sustaining serious injuries could throw your entire life
If you’re seriously injured you’re going to need medical care, something which is incredibly
expensive. You’re probably going to need time off work to recover or you could be left permanently
disabled and unable to provide for yourself. With rising medical and household bills and no means to
pay for them, it’s easy for families to spiral into debt, which ultimately can lead to bankruptcy.
You’ve lost your job
How secure is your job? Any of us could be facing redundancy at any moment. You could be fired
from your role unexpectedly or you may resign for personal reasons. You may be facing
unemployment without any kind of redundancy payment or your package may not last as long as
you need it to. No matter what your circumstances are, it’s common for sudden unemployment to
leave people struggling financially, leading to bankruptcy.
You may find yourself accepting roles that pay less than what you’re used to, which means despite
finding new employment your salary doesn’t reach as far as you need it to with your current bills and
debts. Often those who don’t plan ahead and build an emergency fund are usually hit the hardest.
Divorce or separation from your partner
Are you financially prepared for a divorce or separation from your partner? Could you afford to run
your home and any dependents with only one income if they left? If you needed a divorce, could you
afford a lawyer? Sadly, not all relationships work out and even more worryingly, many people are
left in an unstable financial position afterwards. The legal costs, division of assets, the lack of a
second income – it’s a frightening situation to be left in, especially if you have dependents.
And finally, out of control credit card debt
We all have debts of some sort, however, when those debts become difficult to control and you end
up paying more interest than the amount you initially borrowed, you could find yourself in bad
credit and struggling to stay afloat. It doesn’t take much for credit card debt to mount up and leave
you in a precarious financial situation. Don’t be afraid to reach out for debt advice if you’re
struggling with your debts.