It’s a misperception that bankruptcy is a gradual process caused by financial mismanagement. Common reasons for bankruptcy can strike without warning, and according to the legal team at John D. Wieser, Esq., PC in Rochester, NY, it’s important to protect yourself. Although a bankruptcy attorney can help, risk factor prevention and planning is the best way to be ready should the worst happen.

1. Medical Bills

Healthcare doesn’t come cheap, and when you don’t have decent insurance, copays and expenses accumulate quickly. While average health insurance covers most foreseeable issues, catastrophes and unexpected diagnoses drastically exceed what policies will pay for in most instances. This leaves many people with debt they can’t realistically repay, especially if ongoing care is required.

The best way to prepare is to spend the extra money on premium health insurance plans. While you may not need the coverage, it’s better to have it than to not. Health insurance savings accounts are another great way to put taxable money away, so take the extra steps to cover any unforeseen circumstances.

2. Drastic Income Change

Job losses, divorces, and disability all come with significant changes in income. With mortgages and loans already in place, many people are left to pay bills they can no longer afford. As these debts accumulate, Chapter 7 bankruptcy or Chapter 13 bankruptcy become the only alternative unless a positive income shift occurs.

Planning for the worst is the best way to cover stretches of unemployment or life events. Savings accounts or managed investments are a great way to build a “rainy day fund.” There are also government unemployment benefits and health insurance that will help alongside your savings.

3. Identity Theft

With identity theft, your life savings can vanish within minutes, leaving you with maxed-out credit cards and bills to pay. While many banks and credit companies offer assistance, getting your full amount of money back has a small likelihood. Keeping up with your lifestyle can suddenly become impossible, making bankruptcy a needed reality.

Identity theft is something you always have to be prepared for. When using the Internet on any device, practice safe browsing and secure personal accounts. There’s a variety of software to protect your information and is well worth the investment. It’s also good to spread your money to several unconnected areas, such as a bank account, IRA, and HSA at different institutions. This may make it more difficult for a thief to access quickly.

If you’re looking for debt solutions, turn to a bankruptcy attorney at John D. Wieser, Esq., PC. They have extensive experience with bankruptcy cases and will help you achieve the best possible outcome to re-attain financial well-being. Call (585) 328-0660 today to schedule a consultation with a bankruptcy attorney and visit their website and Facebook to learn more about their practice.