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There are many reasons why people file bankruptcy, especially with the economy struggling in parts of the country.
Most bankruptcies are filed by individuals and there are many reasons why a bankrupt faces monetary challenges.
Some of the reasons people go bankrupt:
1) Job Loss: A majority of bankruptcies in Canada are caused by a job loss. Even with a severance package the loss of steady income can quickly deplete savings and put an individual in a tight financial situation.
2) Reduced Income: Some people might be able to keep their job, but at reduced hours or with the loss of potential benefits and other perks. If you have a reduced income paying your debts can become a struggle and certain debtors consider bankruptcy to get out of debt.
3) Divorce: The cost of getting divorced can be very costly and the loss of a spouse’s income, alimony costs, and a loss of assets and property can lead to bankruptcy.
4) Living With Credit Card Debt: Credit card debt is not always from overspending or poor budgeting. Credit debt can creep up over time due to illness, expenses for emergencies, a loss (or reduction) of income or for many reasons. A hefty credit card bill can have a serious impact on your life and future.
5) Unexpected Expenses: Unexpected events outside of your control can be just around the corner. Even if you are prepared a major unexpected expense can quickly drain a large savings account.
6) Overspending: Managing money can be quite a challenge and it is easier than ever to fall into debt. If you are facing the financial warning signs it is important that you deal with the situation sooner rather than later.
Contact a local bankruptcy trustee today at 1-877-879-4770 toll free or contact us online.
The main causes of bankruptcy are due to unexpected circumstances such as a job loss. Almost all bankrupts are honest and hard working people who only turn to bankruptcy as a last resort.