Law Offices of Jennifer L. Holland
Major Reasons for Filing Bankruptcy
BANKRUPTCY IS A FINANCIAL DECISION. The question is whether this is the time that bankruptcy has become necessary. Contact us for a free consultation so we can help you make the best decision for you.
1
Uninsured medical expenses
2
Unemployment or underemployment (you are not employed at the income level you have been employed at in the past)
3
Divorce
4
Small business
5
Military service
6
Additional dependents (i.e. adult children returning to the home with grandchildren)
7
Job loss, reduced, or business closing
In Alaska, military service is a significant factor (see military service persons in the index). In Alaska we also see a lot of underemployment (for example, you once worked on the Slope and now you work in a local retail store), and seasonal work (commercial fishermen, construction, etc.) as contributing factors for filing bankruptcy.
Many of these factors are largely out of your control. If you have no
medical insurance and spend more than one night in the hospital, you may face bankruptcy. If the average forty-year-old is unemployed for one year, a bankruptcy is likely to follow, most likely within two to three years later. If you are injured on the job and receive any limited worker's compensation, bankruptcy is likely to follow.
We often see high credit card use during periods of unemployment which may include the payment of hospital bills or taxes. In my practice, I would estimate that less than 25% of my clients face
bankruptcy due only to credit card use without additional underlying problems, i.e., unemployment or medical expenses. Of this group, many are unaware of the real cost of interest on credit cards, the over limit charges, the late fees, etc. Remember that credit card companies
are not victims. Almost all of us feel obligated to pay our debts. However, if you are facing growing debt, try to look at the cause(s) of your bankruptcy as realistically as possible as well as the
numbers.