Understand Why You Are Facing Bankruptcy

The majority of people who file for bankruptcy never planned on getting into the financial situation in which they find themselves. Most file because they feel they have more debt than they can repay. Many people are overwhelmed by debt and may ask themselves, “How did I get here?”

Understanding how you got into financial trouble is the key to resolving your problem and ensuring a positive financial future. People usually make the decision to file for bankruptcy because of the stress caused by:

• Bill collectors and late notices
• Being sued and/or wages being garnished
• Threat of eviction or foreclosure
• Threat of auto repossession
• Threat of utility shutoff
• Credit card debt has become overwhelming
• Unable to pay for medication
• No home equity and/or unable to get a loan
• Unable to pay all the bills
• A friend or family member suggested it

However, there is always a deeper root cause that led to the stressful situation. Often the root cause is an event such as:

• Unexpected medical emergency
• Death of a family member
• Divorce
• Job loss
• Cut in pay

Or maybe it is simply a matter of making poor financial decisions and/or living beyond your means.

Often, you may have to do some soul searching and look deep within yourself to identify the true root cause. This may require you to resolve deeper issues with your relationships and lifestyle, such as:

• Issues with your spouse or financial partner
• Gambling
• Alcohol or drug abuse
• Shopping because it’s fun or to make yourself feel good
• No financial planning or discipline

Remember, you must identify the underlying cause in order to prevent the problem from recurring.

Bankruptcy is a fresh financial start for people who can no longer pay their bills and are in a large amount of debt. It is, however, designed to be the option of last resort. If you are considering bankruptcy, a free GreenPath debt counseling session can help you determine whether or not there might be a better way to solve your financial concerns and begin rebuilding your financial future.