Financial mistakes and bankruptcy
On Behalf of O’Brien Law Firm, LLC
Posted on: September 5, 2018
In the 2017 fiscal year, individuals in the United States filed a total of 767,721 personal bankruptcies in the federal courts. Residents of Mississippi may benefit from learning about some common mistakes people make that may lead them to file for bankruptcy.
For example, overspending with credit cards is a major culprit as many individuals do not have an updated budget that is based on what they really need. Not having a well-developed budget means that individuals are unaware of how much disposable income they have and what they can buy without having to incur any debt. It also means that they are unaware of how much money they can actually borrow and repay within a sensible amount of time.
Another mistake people may make that can lead them into bankruptcy is spending money on certain unnecessary things, such as expensive vacations. Many people may be swayed by peer pressure or constant marketing to make these purchases without determining if they are actually able to afford them.
It is not uncommon for financial institutions to solicit individuals for credit cards. However, many people make the mistake of believing that because they have been solicited for credit they can actually afford to take on the debt and pay back the entire amount. They may also mistakenly believe that simply paying the minimum owed on a credit card debt is sufficient.
A bankruptcy attorney may evaluate the financial circumstances of a client and advise them of the differences between Chapter 7 and 13. In many cases, filing for bankruptcy can give a debtor a new financial start and allow them to retain their personal property.