If a Tennessee worker, homeowner or business owner encounters financial challenges, it may take weeks or even months to resolve the issues that are causing the problem. The good news is that most financial crises are temporary. Some are undoubtedly worse than others, however. In fact, many times, the only way to fully resolve a financial crisis is to file for bankruptcy and start afresh.
These issues cause many people to apply for bankruptcy
What constitutes a financial crisis for one person might be a mere bump in the road for another. Here are the top five issues that often lead to unresolvable debt, thus prompting people to file for bankruptcy:
- Reduction of income or job loss
- Medical bills
- Buying on credit with no means to pay the account balance
- Unexpected expenses, such as vehicle or home repairs
Many people in Tennessee and beyond live paycheck to paycheck. They get by just fine until an unexpected problem arises, such as a septic pump goes bad, a pipe bursts or a car breaks down. They have no funds set aside to cover expenses, so they use a credit card. If this happens multiple times, it can spark a full-blown financial crisis.
Why divorce often leads to bankruptcy
If a person files for divorce, he or she may be going from a dual income household to a single income lifestyle, which can be a strain on any budget. This is especially true if the spouse in question has been out of the workforce for a long time after sacrificing a career to stay home full-time and raise a family. Such situations often cause serious financial distress, in addition to other expenses often associated with divorce, such as having to buy a new house or vehicle, relocate or pay child support.
Using bankruptcy as a valuable financial tool
Bankruptcy is often helpful when the goal is to obtain immediate debt relief. It is a way to wipe the slate clean and start afresh, which is often needed after divorce or in the aftermath of a medical crisis, job loss or other life event.