Consumer bankruptcy helps to protect individuals from having to deal with extreme financial hardships in an effort to cover bills that are far too costly. There are many things that can lead a person to file for bankruptcy. One of these is the loss of a job.
One thing that many people don’t realize is that termination isn’t the only form of job loss that can lead to bankruptcy. Having their hours cut or being laid off can lead to financial troubles because many Americans live paycheck to paycheck.
Many people don’t have sufficient emergency funds. In fact, 30% of Americans don’t have any funds that can help them if they have a sudden reduction in income. This could mean financial devastation if they suddenly have to cover their regular bills and the cost of insurance because their working hours were reduced or eliminated. When a person loses their job, they might not be able to afford that insurance coverage. If they need medical care, the sudden influx of bills for their treatment can add more financial strain.
In order to regain control over their finances, consumers who have experienced a job loss or reduction in hours may opt to file for bankruptcy. Bankruptcy can give them a fresh start and allow them to regain control over their financial future once again.
If you’re considering filing for bankruptcy, you may have options about how to proceed. To determine whether you should file a Chapter 7 or a Chapter 13 bankruptcy, consider scheduling a consultation with an experienced advocate to discuss the particulars of your situation.