What factors prompt individuals to seek bankruptcy relief?

Why do individuals initiate the Bankruptcy process?

The economic downturn, known as the Great Recession, has led to an increase in unemployment rates. Consequently, many individuals who have lost their jobs find it challenging to meet their financial obligations. As a result of accumulating unmanageable debt, these individuals resort to filing for bankruptcy. Additionally, the repercussions of the real estate crisis have significantly impacted the financial well-being of numerous individuals. Harvard Law School conducted a study which revealed that medical bankruptcy constituted 62.1% of all bankruptcy cases in 2007. Other prevalent factors include divorce, exorbitant credit usage, and unforeseen expenses.

There is a common misunderstanding that Bankruptcy stems from poor financial choices or inadequate money management. In reality, the majority of individuals file for bankruptcy due to unforeseen circumstances that arise in their lives. Many of our clients have encountered financial hardships triggered by factors such as illness, exceedingly high medical expenses, reduced work hours, inability to work, job loss, the need to support a family member, or legal actions like property foreclosure or credit card lawsuits. These circumstances often prompt creditors to take legal measures in order to collect debts, which can include initiating lawsuits, intensifying collection efforts, imposing wage garnishments, seizing funds from bank accounts, repossessing vehicles, and even attempting to auction off homes or properties.