Through no fault of their own, even the most financially responsible borrowers might find themselves unable to pay back their debts. In these unfortunate situations, bankruptcy may provide a path back to solvency by allowing you to restructure or eliminate most types of debts. Here are some of the most common reasons people find themselves turning to bankruptcy.

4 Common Causes for Bankruptcy

1. Divorce

Getting divorced usually means losing half of your household income, while marital debts and other obligations still need to be paid. Bankruptcy allows you to eliminate joint credit cards, lines of credit, and other debts you shared with your spouse, giving you the resources you need to start over.

2. Medical Expenses

Even if you have high-quality health insurance, a single emergency or serious medical condition can drain your savings and leave you tens of thousands of dollars in debt. In fact, approximately two-thirds of all bankruptcy filings are directly related to unexpected medical expenses.

3. Overextending Credit

Unfortunately, readily available financing makes it easy to overextend yourself by purchasing too many items on credit. If you don’t have enough for basic necessities after paying your debts, you might have to use credit to purchase food and clothing, making the situation even worse.

4. Job Loss

For most people, losing your income for a single month can trigger a financial disaster. Even short-term periods of unemployment can cause financial difficulties from which you may not be able to recover. In these instances, bankruptcy provides a valuable lifeline, potentially helping you avoid foreclosure and discharge most unsecured debts.

If you’re struggling with debts you can’t repay, the attorneys at Arndt Buswell & Thorn S.C. have the experience and resources to help you find relief. Their team has been providing effective legal representation to borrowers throughout western and central Wisconsin since 1991, offering guidance in even the most difficult situations. Visit their website to learn more about their wide range of services, or call (608) 269-1200 to speak with a bankruptcy attorney in Sparta.