Six Financial Emergencies That Can Quickly Put Anyone Into Debt
Friday, May 8, 2015, 6:00 AM | Leave Comment
Most people struggle to make ends meet. With this in mind, the average household only has a couple of weeks worth of income saved up to weather a financial storm.
When they are confronted with a significant financial emergency, the end result is one of financial debt or ruin with little to no hope of immediate recovery.
The following are six examples of financial emergencies that will inevitably leave most people swimming in financial debt.
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Extended Unemployment
Today it is common for people to become unemployed for extended periods of time. Without a job, these people quickly learn that they have no meaningful cash flow.
As a result, not only are these people unable to pay their bills, but they also find that this situation places considerable strain on their credit rating as well.
This additional problem creates even more debt and financial distress.
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Eviction
If struggling to make ends meet did not pose enough of a problem, being evicted from an apartment or rental property comes with its own set of financial burdens.
When a family is kicked out of their home by their landlord, they either have to move in with someone else, live out of their car or attempt to make it out on the street.
Until they get their situation under control, many families compensate by racking up hefty credit card bills.
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Major Surgery
Another common financial emergency that will prove to be overwhelming to a person’s budget is the need for major surgery.
From an appendix ready to burst to a catastrophic injury sustained at work, major surgery is both expensive and will often keep a person out of work for extended periods of time.
Even if a person has insurance that will cover the impact of their medical bills, they still may have to fork over a considerable amount of cash up front to cover their part of the overall costs.
The sum of money required will often place a family in debt and even credit distress.
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Pregnancy
Although it is a joy to bring a new baby into the world, the financial burden associated with pregnancy is often more than some families can truly afford.
Aside from the medical bills associated with the pregnancy, there are the other associated costs that follow.
The baby will need a car seat, clothes, food, and eventually even daycare will create additional financial burdens that may push a family deeper into debt.
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Foreclosure
Having a mortgage is a state of considerable debt for any struggling family. When a person is no longer able to manage their mortgage payments, this financial emergency will typically lead straight to a foreclosure.
A foreclosure not only creates more debt, but it guarantees that a person’s credit report will be subject to negative reporting that will stick with them for quite some time.
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Auto Accidents
One emergency that can completely wipe a person out financially and produce mounting debt is a auto accident. Even if the other person is at fault, this does not change the fact that multiple people in a auto accident may be injured.
In the case of an auto accident, one where a person is not at fault, it is critical that they seek the help of a competent attorney to help ensure that they are properly compensated to cover their pain, suffering and any extensive medical bills associated with their injuries.
According to the experts at The Pearce Law Firm, talking with a personal injury attorney can help you get the compensation you deserve.
Financial emergencies lurk around every corner. It is not a matter of if but a matter of when a financial emergency will rear its ugly head.
When financial emergencies intrude on a person’s life, debt and financial ruin will often be difficult to avoid; however, this does not mean that a person should avoid planning for just such an occasion.
With careful planning, it is possible to mitigate the effects of a serious financial emergency.
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