The current economic state is a predisposing factor to many people getting into bad debts. There is a rise in almost every commodity and this explosion leads to many people spending more than they earn. At times it may not be easy to control the situation but getting to understand the major causes of debt can be of help in avoiding it. Failure to keep track of debts can result in a need to contact an attorney experienced in bankruptcy.
The most common causes of debt
1. Poor money management
A monthly money plan is important. Without one, it is likely that you will spend unnecessary money in an unplanned manner and before you know it you are running bankrupt.
2. Reduced income versus same expenses
Mostly, people tend to forget to balance expenses with the income. In cases where the income has reduced and the expenses remain constant, more money is required and hence debts fill the gap. Always cut down the expenses when the income reduces.
3. Divorce
Divorce exposes one to bad debts. One will always be thinking of ways to replace the spouse and more spending comes in.
4. Underemployment
People who are underemployed spend more than they can afford. They have that notion that they will soon get out of the underemployment state which in most cases is false.
5. Gambling
This is an addictive habit and can easily lead you into debts. It is hard to stop and with the loans being readily available, one is permanently trapped here.
6. Windfall banking
Using what is meant for tomorrow today. For instance, one may bank on an inheritance that might not even be passed on to them. No one is sure about tomorrow so live each day at a time.
7. Financial illiteracy
It is a fact that many people do not understand the way money is made and grows. They lack basics on how to save and in the long run invest for the hard days to come.
8. Not saving enough money or not saving at all
Always be prepared for the unexpected expenditures by making savings. Any uncertainties that occur will not be felt so much if one has enough savings.
9. Medical expenses
With the increased coverage gaps and disintegration of policies, there is an increase in alternatives that are costly. Cash payments are made at the delivery of the service by the doctors. This could be a possible lead to debts.
When to contact a bankruptcy attorney
- If you have not been able to pay your important bills for a while.
- High debt levels with a low income level
- If considering taking another loan
- If creditors are giving you warnings
Contact a Houston Bankruptcy Attorney today.