1. Medical Expenses
A recent Harvard University study showed that medical expenses account for approximately 62 percent of personal bankruptcies in the US. Interestingly, the study also showed that 72 percent of those who filed for bankruptcy due to medical expenses had some type of health insurance, thus debunking the myth that only the uninsured face financial catastrophes due to medical-related expenses.
2. Reduced Income
Companies are cutting down on their expenses; and for many employees, this results in major pay cuts and reductions in bonuses. The end result to employees can include bankruptcy.
3. Job Loss
4. Credit Debt
Credit debt isn't just a result of irresponsible spending. It can also pile up due to catastrophes such as illness and disability, job loss, emergency expenses or unexpected income reduction.
Here are some good tips on how to reduce your credit card debt to help avoid bankruptcy.
5. Divorce
Divorce is a costly business, even without counting lawyers' fees. Divorce and separation can also mean a significant loss of income and assets for either or both partners. It may also mean taking on a portion of your partner's debt if you co-signed or opened joint accounts with them.
6. Unexpected Expenses
7. Student Loans
8. Utility Payments
9. Foreclosure
According to statistics, more than one percent of Americans have to file for bankruptcy in order to avoid foreclosure on their homes.
10. Bad Budgeting/Overspending
