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5 Reasons Why to File for Bankruptcy in Arkansas

While there has been a steady decrease in bankruptcy filings since 2011, there were still 772,545 total bankruptcies filed in the United States last year alone. Arkansas accounted for 10,685 of them.

There are many reasons people file for relief under the United States Bankruptcy Code, many of which occur through no fault of the individual at all.  Here are the five major reasons that people file for bankruptcy relief in Arkansas:

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1. Medical Expenses

We have all made a trip to the hospital or local clinic only to find out later that it was the most expensive trip that we’ve ever made. Minor medical issues can cost thousands, while something more major may cost hundreds of thousands of dollars. These expenses may be incurred even with insurance coverage!

Studies show that healthcare costs in the United States are approximately twice as high as in other high-income countries.  Higher prices for medicine, medical devices, salaries for healthcare professionals, and other administrative costs are what is driving up the overall cost of healthcare in the United States.  As medical costs are virtually unavoidable, it’s easy to see why they result in so many bankruptcy filings.

2. Job Loss

It’s also no surprise that a loss of income is a major reason why many people decide to pursue a remedy through bankruptcy. Just because you may have lost your job or other form of income, your creditors will not cease to request payments. Debts will continue to add up, sometimes reaching a point where repayment is not feasible.

3. Divorce or Separation

The American Psychological Society reports that about 40% to 50% of married couples in the United States eventually divorce. The chances of divorce increase among those who remarry.

Those who have divorced know that it is not without cost—sometimes excessive.  Even if both parties are amicable and have agreed to all the terms of the divorce, attorneys and court costs must still be paid.  If the divorce is contested, it may cost thousands to hundreds of thousands of dollars from start to finish.

Additionally, the financial burden upon divorce can be even greater for those who relied on the income of their spouse during the marriage. With the great cost associated with divorce, combined with the loss of income from the other spouse, debts can amount quickly.

4. Unexpected Expenses

As soon as you think everything is under control, surely something unexpected will come your way. Life can come at you with all kinds of surprises—some good—some bad. Unfortunately, bad surprises likely come with expenses. Whether it is unexpected termite damage to your home, or a blown engine in your car, these are costly expenses that can burden you with debt that you may have not prepared for. For many Americans, these surprise expenses can push them over their financial breaking point.

5. Poor Financial Management

Of course, poor management of one’s finances is another reason that an individual may seek relief from bankruptcy. People can now make purchases twenty-four hours a day and almost anywhere with a smartphone in hand. It can be very difficult to make sure that one’s income is enough to cover all of the many expenses that occur in our day-to-day lives. Because of high interest rates on certain loans, debt can easily incur in amounts that cannot be adequately managed.

If you have experienced any of these situations, you are certainly not alone. Seeking relief through the bankruptcy process to recover your productive capacity may indeed be the best option for you.  If you have any questions and would like to learn more about your options, please contact the Danielson Law Firm today.

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Fayetteville Law Office

(479) 935-8313

909 Rolling Hills Dr.
Fayetteville, AR 72703

Booneville Law Office

(479) 935-8060

4 Village Loop
Booneville, AR 72927

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