What are the top 7 reasons that cause someone in Columbus, Ohio would file for Chapter 13 Bankruptcy?

The Top 7 Reasons People in Columbus, Ohio File Chapter 13 Bankruptcies

Columbus residents file Chapter 13 bankruptcies to escape overwhelming debt when their financial situations become unmanageable. This can happen when bills pile up, income is drastically reduced or people face financial emergencies or unexpected setbacks. Bankruptcies are sometimes caused by several factors, but there is usually a defining event or circumstance that makes a financial situation seem hopeless. Here are the seven most common reasons for filing a Chapter 13 bankruptcy in Ohio.

Medical Bills

Medical debt is the leading cause of bankruptcy in the United States. About 56 million Americans are struggling with medical debt, and many of them had health insurance when they were injured or became sick. When researchers from the American Journal of Public Health studied the issue, they discovered that 66.5% of personal bankruptcies are caused by medical debt.

Job Loss

Managing bills becomes difficult or impossible when a source of regular income is lost. People who lose their jobs usually struggle to make ends meet, and unemployment benefits are rarely enough to cover the costs of housing and other necessities. When jobs are scarce and bills go unpaid, bankruptcy may be the best option.

Credit Card Debt

Credit cards provide consumers with a convenient way to borrow, but revolving debt balances can be very difficult to pay off. Many people find themselves in unmanageable financial situations when they use credit cards to pay for groceries and cover their utility bills during an emergency. This provides them with a temporary respite, but it places them in a revolving debt trap that can be hard to escape.

Unaffordable Mortgages

Many people in Ohio file Chapter 13 bankruptcies because they are facing foreclosure and do not want to lose their homes. People who file Chapter 13 bankruptcies make monthly payments for three or five years to pay down their debts, which gives them an opportunity to catch up on their mortgages and avoid foreclosure.

Financial Emergencies

Even people who manage their finances carefully may be unprepared for an unexpected setback. Only 41% of Americans have $1,000 or more in savings according to the financial services company Bankrate, and 27% have no money at all put aside to cope with an emergency.

Helping Family or Friends

People often feel obligated to provide assistance to friends or family members who have money problems, but their financial situations can become desperate if the funds are not repaid. This can put a strain on relationships and leave people with few options other than bankruptcy.

Divorce

Many divorced spouses struggle to live on a single income, and their predicaments can become dire if spousal and child support payments are not made in a timely manner. This unfortunate situation may be compounded if a divorced spouse has been out of the workforce for some time and lacks the skills needed to find a good job.

A Fresh Financial Start

Life is unpredictable, and even people who manage their money carefully can find themselves facing financial difficulties. A Chapter 13 bankruptcy offers an escape from overwhelming debt and provides the opportunity to make a fresh financial start.