Time and money are two life aspects that are always interacting with us moment-by-moment. The decisions we make are easily influenced by the amount in our bank account or available line of credit. The thought of facing your credit score or really looking at how much debt you have can induce a tremendous amount of fear and anxiety.
There are many reasons why financial hardships occur and when you are aware of them, it may help you plan smarter for the future and avoid the pitfalls that are preventable.
Here are the most common reasons people file for bankruptcy:
- Delinquent medical bills—medical bills are currently the top reason why bankruptcy is filed in the U.S. The heavy weight of bills that insurance companies don’t cover is transferred to patients who may have lost their ability to work and earn money as before.
- Dissolution of marriage—divorce may impact both individuals in negative way financially, but historically, women suffer the most. It is worse when there are children involved and a lack of support to compensate for their expenses, maintain steady employment, or go to school to earn a higher earning job.
- Work termination—getting fired or having the company you own or work for go under can strip you of your financial security. It is not always easy to bounce back and maintain a consistent flow of income. Your local economy may suffer more than other cities, causing you to have to relocate for work.
- Out-of-control spending—uncontrolled credit card spending gives the false illusion of wealth. It is a familiar trap for many people who spend beyond their ability to repay and find themselves overwhelmed with unsatisfied debts.
Freedom starts with awareness
Choosing to get free from the tangles of unmet financial obligations begins with awareness. It takes courage to look at your credit score and tally the amount of debt owed. When you do this, you are empowering yourself to start the journey of financial freedom. When you see what you owe and where you are at, you can start looking at your repayment or bankruptcy options and discovering the way out. There is always a way out and legal resources to make your financial future brighter.