Unusual Reasons That May Send You Filing for Bankruptcy
For most people, the thought of filing for bankruptcy comes as a crushing blow. It comes off as the ultimate fail in all matters finances, at least in the eyes of the world. In some cases, your current predicament may be due to factors beyond your control.
Here are some life situations that may lead you to need to seek out a bankruptcy attorney in Salt Lake City.
A declining income
Contrary to popular opinion, not all people who are insolvent are also unemployed. An economic downturn can lead to a significant drop in your revenue. In such cases, it is common for people to use credit cards to bridge the income gap. If nothing turns up in good time, your debt utilization level hits the roof.
You are likely to incur a Rob Peter to pay Paul situation. Since your income doesn’t suffice to pay the bills, you must borrow money to keep the lights on or buy grocery. Again, an inability to make the minimum payments on the cards leads to penalties and surcharges.
You got divorced
Annulment of your marriage carries a great risk of insolvency. In some instances, you might be held liable for your spouse’s debts. If your ex-spouse doesn’t pay up the creditors might try to collect for you. On the other hand, you might experience financial pressures of supporting two households on the same income.
Child support, alimony, and other mandatory payment might lead you to increase your credit card utilization ration. Especially when carrying other debts such as student or personal loans, mortgage, and car payments. Unless you come into a windfall, you’re likely to face severe financial hurdles.
Financial insolvencies are a harsh reality that people contend with at some point in their life. Some situations that lead up to bankruptcy might be beyond your control, and as such, you should not view it as a failure.