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Common Reasons for Personal Bankruptcy in the U.S.

Bankruptcy can help people in many different situations. Some people might think that everyone who files for bankruptcy was irresponsible with their money or are trying to take advantage of the system, though this is certainly not the case. Our experienced Michigan bankruptcy lawyer helps clients who are struggling financially for a wide range of reasons, many that are beyond their control. The following are some common reasons for personal bankruptcy in the United States. 

Medical Bills

Many people have no control over when injuries or illnesses will strike. With the costs of healthcare in the U.S. today, it is no surprise that numerous households cannot pay for the treatment needed for a serious medical condition in the family. Medical expenses are a leading cause of bankruptcy since the debt can quickly become overwhelming, even with health insurance coverage. 

Loss of Income

Companies can experience downturns, and they might need to cut down on expenses, which can include reducing hours of employees, eliminating bonus programs, or laying off employees. Any unexpected reduction in your household income can cause you to fall behind on your bills or use credit to cover expenses. Even with severance pay or unemployment income, the loss of a job can cause you to quickly rack up debt with few other options until you find new employment, which can take time.


Ending a marriage can often come with financial strain. Not only will you need to pay for court and attorney’s fees, but your income might be significantly reduced as well. Many people come out of a divorce with debts they cannot pay. 

Unexpected Emergency Expenses

Many people live on a tight budget that leaves very little wiggle room for the unexpected. However, if your car needs a costly repair, your water heater stops working, or you need to cover other major home repairs, it can drain your savings or require a huge increase in a credit card balance.


If you fall behind on your mortgage payments, it can seem impossible to catch up, and many homeowners face foreclosure. Bankruptcy can be a tool for some people to avoid foreclosure.

Learn Whether Bankruptcy is Right for You

If any circumstances have led to excessive credit card balances or the inability to pay your debts, you should not wait to talk to an experienced bankruptcy lawyer. The right lawyer will review your financial situation, including:

  • Your income
  • The type of debt you have
  • Your assets and property
  • Your regular expenses

We can advise whether bankruptcy is a logical solution for your financial stress. We can then help you decide what type of bankruptcy to file – Chapter 7 or Chapter 13 – as well as help you through every step of the process. 

Contact a Michigan Bankruptcy Lawyer for Help Today

Michigan bankruptcy attorney Karen E. Evangelista represents clients during bankruptcy cases. If you would like to know whether bankruptcy can help in your situation, please contact us directly to set up a consultation.


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