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The Top Five Reasons People Go Bankrupt

After the housing bubble of the late 2000s, a dramatic increase in bankruptcy filings occurred. The housing crisis hit the South Florida area especially hard, as well as other states that experienced a large amount of real estate investment and speculation.
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After the housing bubble of the late 2000s, a dramatic increase in bankruptcy filings occurred. The housing crisis hit the South Florida area especially hard, as well as other states that experienced a large amount of real estate investment and speculation.

After the housing bubble of the late 2000s, a dramatic increase in bankruptcy filings occurred. The housing crisis hit the South Florida area especially hard, as well as other states that experienced a large amount of real estate investment and speculation.

However, rising and falling markets generally aren’t to blame for most bankruptcies. Most bankruptcies occur due to one of these five reasons:

  • Medical expenses–This is the number-one reason people go bankrupt, even when they have medical insurance. A study from Harvard University found that as many as 62% of all personal bankruptcies are due to medical expenses, and 78% of those were from individuals who had health care coverage.
  • Job loss—Job loss hits doubly hard for many individuals since in America your health care is tied directly to your job. Although COBRA coverage is available, many times it is not affordable, especially since you no longer have income. Some of those who lose jobs may get severance, but for those who don’t, the only form of income for a while may be filing for unemployment, which is only a fraction of what they previously earned.
  • Excess use of credit—Debt can get the best of even the smartest people. When you can’t make ends meet, sometimes people would rather use credit cards than ask for help, which only makes the problem worse. Payday loans and title loans may appear to help at the moment, but in the long term, they create more debt. If a borrower can’t obtain a debt consolidation loan or negotiate other forms of relief, bankruptcy is often the only way out.
  • Divorce—During the economic downturn, divorce rates went down. Not because people were happier with each other, but because they couldn’t afford a divorce. There are legal fees, division of assets, alimony, maybe child support, and then the cost of maintaining two separate households, and that makes divorce expensive to the point of bankrupting some families.
  • Unexpected expenses—Disasters such as earthquakes, floods, or fires can be devastating if a victim is not insured. In many areas where these events are likely or common, you have to buy a separate, expensive policy to cover such events, and some residents aren’t aware of this until it’s too late. Even when your house burns down or is swept away in a flood, the mortgage is still due on the first of the month.

Please keep in mind that every case is different, so if you are thinking of filing bankruptcy, and would like to schedule a no-cost consultation, please contact our office by completing the form on this website or calling us at 954-466-0541.

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If you are considering filling for bankruptcy , this would be the firm to use! Jonathan is very experienced as well as all of his team, Specially Anne ! They made the process very easy and my case was approved due to their help and expertise! I am very grateful to have had them representing me !
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2023-09-05
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2023-03-29
Jonathan and Anne were wonderful and I thank you for helping me with my new beginning.
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ADRIANNE SURRENCY
2023-03-29
I had a wonderful experience with Jonathan Leiderman at LSS Law. Not only is he well experienced, but he is also very patient and supportive throughout a tough time. I appreciate that he takes such a hands-on approach where there is no going through office staff and waiting for a reply. He deals with you one-on-one, and he is your single point of contact. He takes time to answer all your questions and takes the time to ensure that you understand every aspect. He is highly communicative and does so in a timely manner.... I always got a response within minutes or hours, at the latest 24 hours. I don't know how he does it all, but I am grateful that I had him to represent me! I highly recommend Jonathan and LSS Law!
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Jewel Nicholson
2023-02-16
Jonathan Leiderman did a phenomenal job representing me and taking on my case. His knowledge, experience, and diligence quickly became apparent through his work product and the correspondence that he maintained with me. Furthermore, he was always quick to answer my questions and put my mind at ease during the entire process. Jonathan and LSS Law will forever have my gratitude and I highly recommend their services to anyone who is in need of them.
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2023-02-06
I am really greatful to attorney Jonathen Leiderman for patiently working with me through a very stressful period of ambivalence, and then towards resolution of a difficult predicament. His professionalism and empathy were exceptional. I would recomend him to all who need similar services.
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2022-04-04
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