What causes other people's bankruptcies?

Authored by Wendy Witt, Esq.

Bankruptcy has long been associated with overspending and irresponsible behavior. However, that's myth, not fact. While overspending sometimes plays a role in bankruptcy:

  • Medical crisis is the number one cause of bankruptcies. More than half of all bankruptcies are caused by a medical crisis. Medical bills mount up and jobs are lost because of the crisis.
  • Widespread job loss and underemployment in the current economic crisis are, of course, a factor.
  • The shocking housing crisis left many families bankrupt when they couldn't keep up with payments or were forced to move because of a job change and couldn't sell their house to cover the debt owed.
  • Immoral predatory lending* has also been a leading factor in American bankruptcies.
*As mentioned above, we recommend the well-researched predatory lending documentary, Maxed Out. It will make you angry but also help you to understand what may have happened to you.

Here's where to find Maxed Out:

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