When you think of bankruptcy, you think of mismanaged personal or business finances that disallow financial freedom. However, other things lead to bankruptcy. The following life tragedies are just a few examples that frequently end in a meeting with a bankruptcy lawyer.
Working Spouse Dies
Most two-income households remain as two-income households until retirement. At times, this does not always work out as planned. If a spouse suddenly passes away, there may be only one income to cover all the bills that two incomes were barely covering before.
The other problem is when only one person is working, while the mate stays home and does not work. Then there is no income coming in after the working spouse unexpectedly passes away. Within three to six months, the surviving spouse ends up seeking out a bankruptcy lawyer just to keep the house.
Sick Child or Spouse and Tons of Medical Bills
Medical bills, surprisingly, are the second leading cause of bankruptcy. (Massive credit card debt and uncontrolled spending rank first.) When a child or spouse gets a potentially terminal illness, the medical bills rack up fast. Even with health insurance, you could still be staring tens of thousands of dollars in the face. If your child or spouse should also pass away because of the illness or disease, then you are faced with the medical bills and funeral expenses.
An Elderly Parent Breaks a Hip
There is an old adage that says that the best way to live to a ripe old age is to not fall. Broken hips can take you from mobile independence to immobile dependence in a split second. If your elderly parent takes a fall, his or her Medicare is not going to cover a home health aide. Your parent would either have to move in with you, or take up residence in a nursing home where he/she may not fully recover. Either way, you would have to pay for the bulk of your parent's care, adding more financial hardship to your already full plate.
Your Home Burns Down
House fires, despite hearing about them a lot, are more rare than you think. You could live your entire life in one house and never see your home burn down. You could also downgrade from your large family dwelling to a condo and witness the brand-new condo burn down in less than a year.
A burned home equals more than just the loss of your abode. It equals the loss of everything you own, from spoons to clothes to furniture. All of that has to be replaced, which is very costly and creates debt for which you did not ask
