It happens far too often than not when I meet with people considering bankruptcy: I find out that they have done things (dumb things) to avoid filing bankruptcy, like raiding a pension. Bankruptcy rates up there with root canal for most folks, but avoiding it just makes matters worse. You need to give yourself permission to fail.

It Just Isn't Your Fault!

This is because the main triggers for bankruptcy are beyond your control. A colleague of mine, Cathy Moran, wrote on her blog about the 5 sure-fire things you can do to avoid filing bankruptcy. They are:

  1. Have no family
  2. Stay perpetually employed
  3. Enjoy good health
  4. Don’t go into business
  5. Rent, don’t buy, your home

Crazy, right? But I think you see the point. The sacrifices that you would have to make to avoid ever having to file just aren't worth it. The first three items above actually reflect the three biggest triggers to filing bankruptcy.

Top Bankruptcy Triggers

Divorce. A marriage ending can wreak havoc with your finances, not just because of the cost of the divorce itself in legal fees, but also because of expenses that now have to be borne by one income instead of two, along with some duplication (such as rent and utilities for 2 instead of one). This is such a common cause of bankruptcy filing that I have even written a book about it!

Job Loss. It has been a very rocky road since 2007, and many people have gone through at least one layoff, lost steady overtime, or taken a new job at lower pay. Financial commitments based on a certain lifestyle can no longer be met due to a change in income. People survive on credit cards while unemployed, then face a huge balance when they do get a new job.

Illness or Disability. This one is a real double whammy! The medical problem runs up a whole new set of debts, while interrupting your ability to earn the money to pay them! Ms. Moran observes in her post:

"A Harvard study from several years ago found that 62% of bankruptcies were caused by medical bills. Three quarters of those filing bankruptcy because of medical debt had health insurance at the onset of their illness."

This also begs the question of whether even the Affordable Care Act can help avoid the financial catastrophe of health problems if most of the people filing for bankruptcy had insurance.

So What Do I Do?

The thing to remember here is that in the vast majority of cases, people are in a position to file bankruptcy through no fault of their own. If bankruptcy is the right solution to your financial problem, then you need to give yourself permission to fail and move forward with a fresh start.

If you live in the Gloucester County, New Jersey area and are considering filing bankruptcy, please feel free to call me at 856-432-4113 or contact me through this site for a free consultation in my Woodbury office to discuss your case.

If you are looking for more information about bankruptcy, then download my free book,Top Questions People Ask About Filing Bankruptcy in New Jersey.

Steven J. Richardson
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Bankruptcy, Collections, Student Loan, DUI and Traffic Court attorney in Woodbury, NJ.
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