As Americans and Alabama residents navigate a complicated economy with concerns of student loans, medical bills and health insurance, bankruptcy is always a hot topic. The truth is that bankruptcy is not always about being irresponsible with your money. There are circumstances outside your control that can often cause debt to snowball to a point where you need help.
CNBC cites a study done by academic researchers that shows that 66.5% of bankruptcies were caused by some type of medical issue or debt. This could either be because you are out of work when you are sick or injured or you cannot afford the high cost of treatment. The study also shows that medical bills and issues lead to 530,000 families filing for bankruptcy each year.
Medical bills and debt are not the only reasons that people file for bankruptcy and a fresh financial start. The other common reasons for bankruptcy including the following:
- Separation or divorce
- Student loans
- Desire to help family or friends with finances
- Spend more money than you make or live outside your means
- Foreclosure or unaffordable mortgages
While many hoped the Affordable Care Act would help reduce bankruptcies related to medical debt, the numbers have stayed almost exactly the same over the last few years and even risen by two percent. Researchers believe that the biggest problem is lack of access to adequate health care insurance. An additional complication is that most families do not have an emergency savings account, so an injury or illness and time off work can cause problems that are impossible to hurdle without help.