10 Important Factors That Make You More Likely to Go Bankrupt


One of the biggest misconceptions surrounding bankruptcy and other financial difficulties of the same nature is that most people assume it can’t happen to them. Bankruptcy is something that happens to business owners and wealthy people who make bad investments, right? Wrong; it’s something that happens to people you would never expect it to happen to. It happens to people just like you. Bankruptcy is something that can happen to anyone, and you should do yourself a favor and find out what life factors can cause you to have to endure the risks of bankruptcy at some point in your life. Being aware of the many circumstances in life that can cause this kind of financial difficulty arms you and prepares you to ensure that this situation does not happen in your life. Being prepared is always a good idea, and we’re going to make sure that happens to you. Here are 10 factors that make you more likely to go bankrupt at some point.


One of the leading causes of financial problems is divorce. This is not surprising considering the fact that many divorces are the result of financial problems. A staggering number of people cannot afford to support themselves on just one income, and that’s the reason so many people end up filing for bankruptcy so clear their debts.

Student Loans

If you obtain a great deal of student loans, you run the risk of not being able to afford to pay for them. When this happens, you run the risk of filing for bankruptcy as a way to gain control of your finances once again. These are very expensive, and too many people use them for reasons that are not related to school, which means they obtain too many loans and too much debt.

Medical Issues

The sad fact about the people in this country is that our medical insurance is really pretty depressing. Too many of us are consumed with paying high premiums for subpar insurance policies that lead us to realize we cannot afford actual a healthcare. Most Americans are one medical emergency away from bankruptcy, and that’s a depressing fact.


The more debt you have, the more likely you are to be unable to afford it. This should go without saying, but the more debt you have, the more likely you are to file for bankruptcy. If you have debt, do what you can to pay it off as quickly as possible.

Family Issues

Many people state that the reason they are in the middle of a bankruptcy is the fact that they have family issues. This could mean anything from family  members who are repeatedly in need of being bailed out or sick family members that need expensive care you just cannot afford to pay for. A parent that has to come live with you, a child with medical issues; there are so many reasons that people cannot afford to continue to pay their bills.

Job Loss

It’s one of the leading causes of most financial issues. When you have no job and no income, you have no way to pay your bills. Even just a few small bills can result in the need to file for bankruptcy if you are unable to find the funds to pay your expenses. This why it’s important to have at least a year’s worth of savings in an account somewhere so that you don’t have to worry quite as much when a job is lost. You must have savings to protect yourself from situations such as these.

High-Risk Mortgages

These are the type of mortgages that people just can’t afford. This is the mortgage you did not actually qualify for but were given anyway. Most people owe more on their homes than they are actually worth, and this is a dangerous position. If you add any addition debt into the picture, it becomes much more likely that people will fall into more debt than they can afford and that they will end up going bankrupt. If your mortgage is too much, you know it. Don’t let the idea of having a beautiful house and eventually being able to afford to make you do something stupid that can ruin your financial future.

Raising Kids

Kids are expensive; there is little doubt about this. However, this does not mean that you can’t raise them. It just means that you need to be very sure you can afford it. You need to be certain that a child isn’t going to send you over the edge as far as your finances are concerned so that you can do what it takes to raise them properly and still afford to live your life correctly. For example, if you can’t afford to pay for private school, then don’t. Public school is free.

Income Reduction

Reduction in income doesn’t necessarily have to come from job loss. Did you have to get a new job that ended up costing you more? Perhaps you got a new job because of better benefits but the pay is less. Perhaps you moved and had no choice but to take a job that doesn’t pay as much. Perhaps you lost out on hours at work and it’s costing you more than you can afford. These things can all add up to a very disturbing loss of income that can cause you to lose money and become much more likely to file for bankruptcy.

Having Debt in Retirement

If you can’t pay off your debt before retirement, chances are very good that you will end up filing for bankruptcy. You should have a house that has no mortgage, no credit card debt, no car debt and not other debt once you reach this age. Retirees live on a fixed income that makes it nearly impossible for you to afford extras. If you want to enjoy your retirement and not worry about financial failures, you’re going to need to find a way to ensure that you have all your bills paid long before.

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