Bankruptcy is a situation that can befall anyone. Even some of the biggest celebrities have struggled with money issues. Although a bankruptcy is beneficial for Tennessee residents with mountains of debt, such a process should not be taken lightly. One may wonder what situations warrant a bankruptcy.
When your debts outnumber your income, then there is a good chance that bankruptcy can help. Consumers may get into this situation by overspending. However, the fact of the matter is that most debts that lead to bankruptcy are not caused by excessive shopping trips at the mall. Most credit card debt is acquired by simply trying to pay for everyday living expenses.
Even a short period of unemployment can cause debt to rack up. Most people do not have savings to help them through such emergencies and they end up spending more money than they have. Those who are self-employed may also face financial challenges since their income may be irregular.
Medical expenses or unpaid taxes can also rear their ugly heads. Even worse: a divorce. Some people have lost millions of dollars when their marriages ended. All of these situations can lead to financial ruin.
It is important to assess all your options before settling on bankruptcy. However, be wary of debt consolidation and settlement offers. There are often no guarantees with these offers and they can end up ruining your credit in the process.
Bankruptcy is beneficial for many people. It can help with debt problems, but it does come with some negative aspects. Contact a bankruptcy lawyer to see if it is right for your situation.