One of the most common myths that people buy into about bankruptcy is that, if you file, it’s all your fault. In fact, this is, unfortunately, a reason that many people choose not to file. They worry about what friends, family members and business associates are going to think. They feel like everyone is going to blame them.
The truth is that it’s simply not your fault in the vast majority of cases. Bankruptcy can happen when someone simply has poor spending habits or makes financial mistakes, but this is not all that common. In far more situations, things that are entirely out of your hands cause you to file bankruptcy, even when you’ve made all of the right financial decisions.
Actual reasons for bankruptcy
For instance, did you know that medical debt is the No. 1 reason that people file for bankruptcy? You cannot control if you get sick or injured, and you can’t change the fact that medical care is incredibly expensive in the United States. When something happens, you know you need proper care, whether it’s affordable or not. Even being a responsible saver doesn’t mean you’ll have tens of thousands of dollars on hand at all times.
Another major reason for bankruptcy is job loss. Say there is a recession in the area and your employer sees their sales cut in half. They decide to downsize, and they have to fire a lot of terrific workers who have done nothing wrong. You didn’t want to lose your job, but your responsible, normal debt — a mortgage, a car loan, etc — is too much to pay back if you’re unemployed.
Don’t buy into the myths. Bankruptcy isn’t your fault, but it can be a very useful tool to get out of debt. Be sure you know what options you have.