For everyone, bankruptcy isn’t part of “the plan” they had for their life. However, even if no one plans for it, bankruptcy is an option for when things just get out of control. Why do people file for bankruptcy in Minnesota? Sometimes it is because they were bad with their money, but mostly it is because something unexpected happened.
Top Reasons For Bankruptcy Filing in Minnesota
The common reasons for why people file for bankruptcy in Minnesota are much the same as the rest of America, and they include:
What is the number one reason most people end up filing for bankruptcy? It is medical expenses. Even with insurance, medical bills can be out of control. One heart attack or even having a baby can be enough to force you to live below the poverty line. When you get that eye-popping medical bill, bankruptcy may be your only option to handle that debt.
It could be a sudden layoff, termination, or even resignation that does it. Going from a two income household to a one income household can be tougher than expected, especially with a mortgage and two car payments. Sometimes things can fall so behind that even if new employment is found, you have a hole of debt that you can’t financially crawl out from.
Excess Use of Credit
At a glance, credit cards can seem like that magical tool where you can buy what you want today and worry about actually paying for it another day. Sometimes you use it because you can’t afford to pay rent this month, but when next month comes around, you have rent and a credit card payment with interest. Some credit cards can be an unexpected trap for those that perhaps use them a little too often. When you have multiple credit cards where you can no longer pay the minimum payment, or have gotten to the point where you use one credit card to pay off another, then bankruptcy is something to consider.
Many will find that after a divorce, the next step is bankruptcy. However, bankruptcy isn’t the answer to escaping spousal support or child support payments. Bankruptcy doesn’t discharge those payments. However, it can be an answer to the wage garnishments that can come from them as well as helping you recover from missed payments. Unfortunately, often the act of having to pay for an expensive divorce lawyer combined with splitting up assets is enough to make people fall into serious debt. First comes the end of a marriage, and then comes the need for a bankruptcy lawyer.
While those in Minnesota don’t need to worry about earthquake damage, many homeowners are surprised to find their home wrecked by a flood and home insurance that doesn’t cover floods. While bankruptcy still has this sort of stigma that it is only for people who are bad with their money, in truth it is more often for people that occur unexpected expenses.
If your house was destroyed by something not covered under insurance or if you had a sudden medical emergency, it can financially ruin you and it certainly doesn’t mean you mismanaged your money. This, in essence, is why more people in Minnesota file for bankruptcy in the first place. It is not about gaming the system, it is about recovering from a badly dealt hand.
If you are in serious debt and don’t know what step to take next, bankruptcy might be for you. Contact us today to talk over your options with the skilled professionals at the Law Office of Walker & Walker. We can help you get your life back on track.