Basic Information about Bankruptcy

by: Justin Baxter

 

Deciding whether to file bankruptcy is a very serious decision. The majority of bankruptcies are precipitated by circumstances outside a person's control -- loss of a job, divorce, or significant illness. A recent study published in the American Journal of Medicine concluded that 62.1 percent of the bankruptcies were medically related because the individuals either had more than $5,000 or 10 percent of their pretax income in medical bills, mortgaged their home to pay for medical bills, or lost significant income due to an illness. On average, medically bankrupt families had $17,943 in out-of-pocket expenses, including $26,971 for those who lacked insurance and $17,749 who had insurance at some point. The stress of these events is compounded by collection letters and calls, and the fear of losing a home to foreclosure.