• 03
  • September
    2010

In our last post, we discussed some of the recent statistics about bankruptcy filings around the country, and more particularly, in Tennessee. Here, we wanted to talk a little about some of the reasons for the high number of bankruptcy filings.

According to some, much of the recent increase in bankruptcy filings may be due to the fact the people who have been struggling for the last few years and are beginning to run out of financial resources. Many of those that have fallen on hard times may have finally exhausted their savings, maxed out their credit cards, or used up available retirement funds.

Overall, job loss and continued high unemployment rates are likely the main causes of bankruptcy. Many that lost good paying jobs over the last few years are having a hard time finding employment, and even if they are able to find work, those new jobs rarely pay as much as their old ones. The consequential drop in income makes it difficult for people to keep up with the household bills and mortgages that may have been well within their budget on their previous salary.

Other common reasons for bankruptcy include divorce and medical bills. A divorce often results in one or both spouses filing bankruptcy because the financial difficulties brought on by splitting one household into two are often overwhelming. In addition, divorce is often the end result of severe financial difficulties as unmanageable debts and financial pressures but too much stress on a marriage.

Medical bills, on the other hand, often put families into a deep financial hole, of which they can never work their way out. Even for those that have insurance, medical bills can quickly get out of control and absorb any extra income a family may have.

If you have encountered any of these problems, you may want to contact an attorney to discuss the potential benefits of bankruptcy. Instead of exhausting your retirement accounts or selling off cherished personal possessions, it may be worth your time to see if a bankruptcy filing can help you get back on your feet.

Related Resources;

Bankruptcy filings rebound (The Tennessean)