Causes of Bankruptcy

Excessive debt

Accumulating too much debt, especially with high interest rates or unfavorable loan terms, can make it difficult to manage monthly payments and ultimately lead to bankruptcy

Loss of income

Unemployment, job loss, pay cuts, or disability can cause this

Unexpected expenses

Unforeseen events like medical emergencies, car repairs, or natural disasters can create significant financial strain and debts that are difficult to repay

Medical debt

High medical bills, especially for unexpected or chronic conditions, can quickly drain savings and lead to bankruptcy, even with health insurance

Divorce

Can be financially challenging with legal fees, property division, and supporting separate households potentially contributing to debt and bankruptcy

Business failure

Many businesses go bankrupt due to a combination of factors like low sales, difficulty managing cash flow, and accumulating debts

Other factors

Financial mismanagement, overspending, tax debts, and unexpected expenses