97 Percent of Bankruptcies in America are by Individuals
You would think that businesses would lead the bankruptcy charge, but according to US bankruptcy court statistics it is individuals that file for bankruptcy.
What are the top reasons people go bankrupt?
1. Medical Expenses
By far, 62% of all, bankruptcies are caused by the high cost of medical care. Even those with health insurance file for bankruptcy as a result of unexpected medical expenses.
2. Reduced Income from Job
The key word here is “reduced”. It’s no secret that Americans live pretty large compared to other nationalities. Many people don’t save enough for a turn of fortune in their jobs. Combine this with a comfortable lifestyle and it can mean bankruptcy.
3. Loss of a Job
When you lose your primary source of income, it can take a while to get another job. During this time people still have payments that they have committed to. People are good hearted and tend to continue to honor their debt; sometimes for longer than it takes to get a new job.
4. Credit Card Debt
Some would say this is a subset of the reasons stated above. It makes sense. Say you have an unexpected medical bill. What option do people have besides putting the expense on their credit card? When you lose your job, you still need to pay for food… so out comes the credit card. Add to this that many Americans have a shopping addiction.
5. Costly Divorces
Lawyers fees, alimony, and perhaps taking on former spouse’s debt in joint accounts or contracts can sink even the most sturdy financial plan.
An accident is an unexpected turn of events. Most people don’t save, or don’t make enough to save for things like automotive breakdowns or accidents that total their vehicle, flood or storm damage, loved ones needing help, or veterinary bills for your best friend.
7. Student Loans
The cost of a higher education has increased by more than 11% across the board for tuition from 2012 to 2016. The majority of students finance their college education. This can not only take years to pay off, it can also cause a person to file bankruptcy when the other expenses of living keep going higher, and income remains steady.
Filing Bankruptcy Means Your Credit Score Suffers
Even folks with great credit before they file for Bankruptcy can see a 100 point drop or more in their credit scores.
Interestingly, people with already poor credit scores are not hurt as much as those with higher scores to start.
The purpose of this article isn’t to give advice on whether you should file for bankruptcy. But it is a fact that filing for bankruptcy will have a serious impact on your ability to get credit moving forward.
No Credit Check Car Financing
D1 Auto Credit is more than a certified pre-owned car dealership. We help those people in Denver who have gone through a bankruptcy and need a reliable vehicle.
We loan based on your ability to make a down payment on a vehicle, what your current income and expenses are, and we put you in a vehicle that you can afford. We have a no credit check policy, so we don’t take your credit score into the equation.
Call 303-274-7692 today to learn more.