Five Reasons People Consider Declaring Bankruptcy

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Five Reasons People Consider Declaring Bankruptcy

• Richard Killen Associates Ltd.

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While many people believe that declaring
bankruptcy is always a sign of financial
mismanagement, this is not always the case.
Misfortune and disaster can also lay low someone
who had been keeping their head above the
financial waters. So here are five common reasons
people become insolvent and may need a bankruptcy
or a consumer proposal to solve their problem
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• Losing their job
• In an iffy economy, unexpected job loss is an
  increasingly common reason for people to get into
  financial trouble.
• Along with the serious blow to their self-esteem
• that accompanies being downsized, they could also
  be put in a precarious position with a sudden
  drop in income.
• If this is compounded by their spouse loses
  his/her job, or being laid low by illness
  disaster can really strike. Suddenly they find
  themselves coping with bills not covered by
  unemployment benefits or health insurance, and
  begin the slippery slope of using credit to pay
  for everything.

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2. Separation and Divorce Not only does marital
breakdown come with a high emotional toll, it
can hit the pocketbook equally hard. Legal
expenses can quickly mount up, especially in a
contested divorce. And then living expenses are
doubled as each ex-spouse sets up their own
household. Everything can quickly get very
expensive.
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3. When Lighting Strikes The nature of many
disasters is that they come out of the blue. Your
car suddenly breaks down and costs thousands to
fix up. Your roof gets irreparably damaged and
your insurance doesn't cover it. No matter what
the disaster is, it has to be met and savings can
dry up almost overnight.
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4. Retiring With Debt In an era where fewer
people have adequate pensions, more and more
people are retiring with serious debt loads, and
reduced income to meet the payments and little
prospect of increasing that income. Or, they may
go into debt helping out their children or
grandchildren who find themselves in financial
straits. Stats show that number of seniors filing
for bankruptcy is greatly on the rise.
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5. Financial Mismanagement OK, this one has to
be said. This may come as a shock, but people are
human. With the modern reality of easy access to
credit, anything from a shopping spree to a
vacation, to a house purchase can be a mistake,
although it doesnt appear to be at the time. So
people take the risk and later live to regret it.
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Every one of us makes mistakes daily. This does
not define us. What we do about them is what
defines us. So misspending can get people into
trouble. But this is a human mistake that many of
us make. They just need to learn to forgive
themselves, take the necessary steps to address
the situation, and then get on with their life.
However, the last paragraph is easier said than
done for most people. We can help by showing what
the options are for dealing with debt crisis. If
you are considering declaring bankruptcy call
Richard Killen Associates for a free assessment
and a chance for a new start, just visit
rkillen.ca or call [phone].