4 Life Events That May Lead to Bankruptcy and How to Reverse the Trend
Thursday, April 28, 2016, 6:00 AM | Leave Comment
Life is bound to give you several unexpected events each year, so you need to be prepared for almost anything. If you do not try to prepare for the unexpected, then you will end up with massive expenses with no way to pay them.
This has the potential to drastically hurt your life by causing you to file for bankruptcy.
If you follow this guide, then you will be able to easily thwart the four most common life events that lead to bankruptcy.
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Extended Hospital Stay
A study by Harvard University has proven that more than 60 percent of all bankruptcies are caused by unexpected medical bills.
While you never know when you will need an extended hospital stay, you can prepare for the unexpected by getting great medical insurance and temporary disability insurance.
These forms of insurance will reduce your medical bills while also letting you get a paycheck while you are out of work.
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Divorce
Even if you are able to get divorced without spending a fortune on lawyer fees, it can still lead to bankruptcy if you are not careful.
The reduced income and increased expenses caused by divorce is one of the most common causes for bankruptcy.
Filing for bankruptcy together before getting divorced can actually help both parties drastically reduce their upcoming expenses.
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Job Loss
There are few things that will hurt your finances more than losing your job. Severance packages and unemployment benefits can only help for so long.
Unlike the other options on this list, there is not much you can do to help with the dwindling finances associated with losing your job.
If you are unable to find a job for an extended period of time, then you would be wise to contact Morrison & Murff or a bankruptcy firm near you to learn more about your bankruptcy options.
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Overspending
Just because you have several credit cards does not mean you are able to spend frivolously. Irresponsible spending may make your life better for a while, but you are going to be in trouble in the near future.
The best way to avoid bankruptcy caused by overspending on the credit cards is by creating a budget. If you can’t afford to purchase something with cash, then you should not buy it with a credit cards. The only exception to this rule is if it is a major emergency.
Nobody wants to go through the long and painful process of filing for bankruptcy. Preparing for the unexpected and living within your means is the only way to get through the most difficult times in your life with relative ease.
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Anica Oaks is a Freelance writer and web enthusiast. Read some of her published work on her Google+ page.
