Common Reasons Why People File for Bankruptcy
Author : Debt Free | Published On : 02 Mar 2021
Anyone can be at risk of bankruptcy. There are circumstances where bankruptcy might be unavoidable. It’s important to recognize these circumstances so you can reduce your risks.
Here are some of the most common reasons why people file for bankruptcy:
1. Going through an unforeseen circumstance.
These unforeseen circumstances could be anything from the death of a loved one, an accident, or a lawsuit. It can also be due to a natural disaster that has rendered a home or a business damaged beyond repair. Economic issues can also be a part of unforeseen circumstances. People who lost their jobs suddenly might also find themselves filing for Bankruptcy in Kamloops.
Reducing your risks is important to prevent bankruptcy. You can get insurance to protect you from unemployment, liabilities, and economic slumps.
2. Not Looking Into the Future Enough
Despite preparing for the uncertain future, some people might still fall prey to bankruptcy because of their short-sightedness. For instance, if you are in a hurry to expand a business without determining if it fits your long-term goal or if you are in a position to do so can bring a lot of consequences. Businesses who expand too fast might end up shortchanging their other services, which can cause them to lose customers and eventually file for bankruptcy.
3. Making the Wrong Decisions
So you decided to invest your money and put all your savings in one mode of investment. If it fails, your money will go down the drain. Many people have lost their money by making the wrong decisions, especially in the stock market.
Why Filing for Bankruptcy Might Be the Best Choice for You
Filing for bankruptcy isn’t the dead-end you think it is. In fact, you might find it liberating. Although it is a last resort, it can help you rebuild your finances back.
When you file for bankruptcy, your creditors will cease hounding you. It’s like a big weight is lifted off of your shoulders now that you aren’t being constantly hounded by your creditors.
It is also possible to retain some of your assets. If you want to protect some of your assets, you can hire a licensed insolvency trustee to help you in filing for bankruptcy.
It can hurt your credit score. But if you prolong the agony, debts can do more than just hurt your credit score. It can also hurt your well-being. So, the best thing to do is cut your losses and start anew.
You need the help of a licensed insolvency trustee such as Mike Wright & Associates to get the job done. There are a lot of things that need to be done when filing for bankruptcy and you need to make sure that a professional does these important things.
Shane Taylor is the author of this article. To know more about Consumer Proposal in Kelowna please visit our website: debtfreebc.ca