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How even frugal spenders can end up in bankruptcy

On Behalf of | Mar 11, 2015 | Chapter 7

It is easy to think that bankruptcy is only for people with terrible spending habits or people who want to do everything they can to cheat creditors. It is especially easy to think this given how the economy has improved and more people are back to work, which commonly means that they would like to save money and pay off bills.  However, the notion that only greedy, irresponsible people and folks who skirt their financial responsibilities need bankruptcy has been debunked.

A study conducted by Demos, a think tank, found that prolonged bouts of unemployment and lingering health issues were the most common reasons behind high amounts of credit card debt, which is a primary indicator of financial health and/or the need for bankruptcy protection. After all, a prolonged bout of unemployment can bring about the worst in person’s financial condition. During these trying times, it is normal to depend on credit cards to make ends meet since unemployment compensation does not always cover normal expenses that generally would be taken care of with a regular paycheck.

The same issues can be attributable with health care issues. Despite the presence of health insurance, there may be procedures (which may be necessary to maintain one’s health) that may not be covered. So a patient must make a decision; live with that painful bunion or bypass that root canal or put it on a credit card?

Either way, heavy credit card debt can be discharged through bankruptcy. If you have questions about how you can move past troublesome debt, an experienced attorney can help.