Top 10 Reasons People Go Bankrupt

Bankruptcy is more common than people think, especially in this ‘age of austerity’. Some of the most common reasons, listed here, show how it could happen to anyone.

1. Sickness

Illness and injury can’t be predicted unfortunately, and can happen at any time. Time off work without pay can lead to bankruptcy alarmingly quickly.

2. A Pay Cut

Employees at a business of any size can find their income suddenly reduced, leaving them struggling to maintain a lifestyle they could previously comfortably afford.

3. Redundancy

Worse than a pay cut is outright redundancy. Without savings in the bank, a gap in income can easily leave people facing huge debts they’re unable to pay.

4. Credit Card Debt

It’s all too easy to tell ourselves we’re not really racking up debt when we put it on plastic, but not paying it off every month is a fast track to bankruptcy.

5. Divorce

With or without a pre-nup, there are often no winners when it comes to divorce, including financially.

6. Unexpected Large Expenses

Having to pay for a large and unexpected expense can leave nothing left in the bank to cover other costs.

7. Unpaid Fines and Bills

From utility bills to parking fines, bills left unpaid can quickly mount up into huge debt.

8. Repossession of Property

Every homeowner is familiar with the dreaded words, ‘your home may be repossessed if you fail to keep up repayments on your mortgage’.

9. Bad or No Budgeting

Even with enough money coming in, failing to budget and live within our means can spell financial disaster.

10. Student Debt

A university education doesn’t automatically lead to a high-paying job, but graduates who don’t pay off their loans can be on the road to bankruptcy.

Bankruptcy can be a worrying burden, but with expert guidance, there’s light at the end of the tunnel. Are you considering going bankrupt to clear your debts? Irwin Insolvency can help by providing clear, practical and compassionate advice on any personal and business financial stresses.