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3 reasons holidays and bankruptcy are connected

On Behalf of | Dec 11, 2022 | Bankruptcy Law |

Many people in Tennessee and throughout the country are gearing up for holiday celebrations with their families and friends. For some, unfortunately, the season will end with financial distress, which they may or may not be able to resolve in a swift and efficient manner. It is not uncommon for holiday spending to get out of hand, resulting in financial crises that require extra measures, such as filing for bankruptcy, to resolve.  

There are several reasons why the holidays and bankruptcy often go hand-in-hand. Thinking ahead and careful planning is helpful. However, even those who feel that they are well-prepared can be hit with unexpected expenses that cause their finances to plummet.  

Using credit as cash for holiday spending a red flag 

In a modern world where some merchants no longer accept cash at their registers, consumers have gotten into the habit of shopping on credit. While this presents little to no trouble for those who pay off their credit card balances on time, it can quickly cause debt to increase for those who forget to send in a payment or get behind in keeping payments updated. Credit card debt often leads to increased interest rates, which exacerbates the debt even further.  

Medical emergencies, car repairs a concern topo 

A person might have taken time to create a holiday spending budget, only to have everything thrown out of whack when unexpected expenses arise. These often include medical emergencies, car repairs or household maintenance needs, such as a broken heater during the winter in a cold climate. With even one emergency, it can be difficult to get finances back on track. Sadly, many Tennessee residents and workers in other states will unexpectedly lose their jobs this holiday season, which makes it difficult or impossible to make ends meet at home, especially in households where there is only one wage earner. Exploring options for bankruptcy can provide debt relief support to those in need.