Bankruptcy aheadAccording to uscourts.gov, more than 1.1 million Americans filed for bankruptcy between September 2012 and September 2013. Surprisingly, that number actually represents an overall decline in the number of bankruptcy filings over previous years. However, the decreased number of people filing bankruptcy claims does not necessarily mark an improvement in the economy. Indeed, countless numbers of Americans will be filing for bankruptcy over the next six months as their poor finances become too much to handle.

Most Common Causes for Chapter 7 Bankruptcy

According to NOLO, Chapter 7 bankruptcy is most useful for private individuals who are overcome with debt and have no definite ability to pay that debt in the future. Effectively, Chapter 7 bankruptcy allows the trustee to cancel all or most debts. Some of the most common reasons for filing for Chapter 7 include:

  1. 1. Medical Bills
    As CNBC writes, almost 56% of American adults will struggle to pay off medical bills this year. For some, the problem is temporary and can be taken care of with careful planning. However, for as many as 1.7 million people, according to NerdWallet, bankruptcy will be the only option in 2013.
  2. 2. Job Loss
    It should be no secret that job loss leads directly to economic instability. Consider, according to Gallup, 44.5% of Americans get their health insurance from their employers. If they lose their jobs and have medical problems, they are likely to fall into a cycle of excess bills leading to bankruptcy.
  3. 3. Poor Financial Planning
    When most people think of bankruptcy, they assume that everyone seeking bankruptcy, whether Chapter 7 or otherwise, is doing so because of poor financial choices. While that isn’t true for everyone, CNN writes that poor financial decisions are the third most popular reason for filing for bankruptcy – not terribly surprising when you realize the average American household has $15,950 in credit card debt.

When to File for Bankruptcy

Assuming the requirements for filing bankruptcy are met, Americans in need of Chapter 7 protections should speak with a lawyer and file for protections immediately. The fact is that doing nothing will not make the problem go away. With Chapter 7 bankruptcy attorneys, each indebted American can work out a solution that addresses their particular needs quickly.

The fact is that most Americans who file for bankruptcy are forced to do so due to no fault of their own. Whatever the cause, however, finding a lawyer who can help with the process is crucial to discharging medical bills, credit card debt, and other common causes of life-altering financial distress.