Some people avoid filing for bankruptcy because they think that their challenging financial situation is completely their fault. There can sometimes be a bit of a negative perception surrounding bankruptcy. People will claim that individuals should not use the bankruptcy process because they should be responsible for the loans that they took out. They see bankruptcy as a way to get around this responsibility.
There are a lot of problems with that theory, but let’s focus on the basis of the overall opinion: The fact that bankruptcy is someone’s fault. Is that actually true? If you find yourself facing overwhelming debt and you’re considering using bankruptcy to get out of it, are you the one who put yourself in this position? Probably not.
The real reasons for bankruptcy
If you look into the reasons why bankruptcy happens, what you’ll find is that a lot of reasons have very little to do with any particular individual who is filing for bankruptcy. A good example of this is when people have outstanding medical debt. No one decides to get sick or injured, and few people are going to put off medical care just because it’s expensive. Medical debt is cited in the majority of bankruptcy cases, showing that the system is certainly not working from a financial perspective. That’s not the fault of the injured or ill party, but of the system itself.
Another common reason for bankruptcy is job loss. There are cases in which job loss is someone’s fault, but this is certainly not always the case. Maybe the local economy simply entered a recession. Your boss decided that they had to downsize. Your job was eliminated, and it was suddenly impossible to pay off credit card bills or home mortgage loans that previously felt relatively easy to afford. It’s not as if you made reckless spending choices. You just did not assume that you would be a victim of downsizing.
Getting started with bankruptcy
As you can see, the reasons that people most commonly file for bankruptcy are largely out of the hands of individual filers. As a result, you should resist the temptation to buy into the negative stigmas and perceptions about the process. Simply consider all of the legal tools that you have at your disposal and seek legal guidance to confirm whether filing for bankruptcy could benefit you and your family. If so, you can make responsible choices after you have received relief and you can build your financial future from there.