Top Reasons People Go Into Debt in America


September 30, 2016

If you are reading this blog because you are in debt, you’re not alone. Many Americans are in debt, and you may be surprised to know that many of them are in debt for similar reasons. Debt can be daunting, and you could be looking for a Clearwater bankruptcy attorney if you don’t take measures to avoid it getting out of hand. Here are the top reasons that people go into debt in America.

Clearwater Bankruptcy attorney explains common American debt

Lack of understanding is a major cause of debt, particularly with credit cards. A credit card can sound like a great idea. Credit card companies target people who aren’t aware of their budget, so not understanding the full cost that will go into taking out a credit card can be detrimental.

Understanding your budget in the long term is vital to staying out of debt. Too frequently, people spend money when they have it, not considering what they will need and be making in the future.

Reduction of income is another very popular cause of debt. Many Americans are in debt because they have seen it significant decrease in there and column other expenses have remained the same. This could be from a loss of job, demotion, or inconsistent work.

Divorce is also at the top of the list for reasons that people go into debt. It can be an expensive process, not to mention it reduces your income if you were a part of a two-income household. In fact, major life changes in general have a serious impact on financial situations. That is why another frequent reason for debt in America is medical expenses. People who have sudden or significant medical expenses can experience major hardship.

What will have the biggest impact on your financial situation, however, is your personal decisions. Poor money management can make the difference between going into debt and staying financially sound. This is why gambling is such a popular reason for people to go into debt. Also included in this category is not saving enough money, a temporary leave from work without proper planning, and spending money that is counted on but isn’t made yet.

These are all surprisingly common reasons that people go into debt. If you find yourself in debt, call your Clearwater bankruptcy attorney to find out how you can manage your debt and what your rights may be.

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