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Issues that often precede bankruptcy

On Behalf of | Mar 5, 2024 | Bankruptcy Law |

Mississippi has not been immune to the economic struggles millions of people throughout the country have experienced in recent years. Many people in this state are struggling to stay afloat financially. While each person’s circumstances are unique, several issues are common among those whose finances have gotten out of hand, compelling them to seek debt relief, such as filing for bankruptcy.

Experiencing just one of these issues is enough to spark a financial crisis. Unfortunately, many people encounter several of these issues simultaneously, bringing them to the brink of financial ruin. Thankfully, programs like bankruptcy exist to help people resolve their debt and take steps toward a brighter financial future.

Top causes of debt that often lead to bankruptcy

The issues shown in the following list are often associated with high amounts of debt, which may, in turn, compel someone to file for bankruptcy:

  • Car loans and home mortgages
  • Student loans
  • Medical bills
  • Credit card debt
  • Gambling
  • Divorce
  • Loss of income

While a student loan may not be dischargeable through bankruptcy, if a person’s other debts are paid, it leaves more funds available to pay back the student loan.

Making the decisions to file a debt relief petition

There are several types of bankruptcy. Before filing a petition, it is best to determine which program best fits a given need. For example, if a person is earning an income below the state’s median level, then a Chapter 7 bankruptcy might be the best option. On the other hand, if a person earns more than the median, he or she is disqualified from Chapter 7 but may apply for Chapter 13. A Mississippi bankruptcy attorney can provide support throughout the process.