The common stigma around bankruptcy is that filing for it means you have poor money management skills. This misconception is dangerous because it can make people considering bankruptcy fear embarrassment or shame.

The truth is that those who file for bankruptcy could easily be a circumstantial victim of any one of these common money issues.

Medical bills

Getting into an accident or developing a disease is unexpected, expensive and difficult to handle. While in a weakened state, it’s unlikely that people in this position can work extra over-time, get another job or even keep up with their current income to cover the associated costs of the issue.

Family crisis

Medical debt can also become an issue when someone else in the family falls ill or gets injured. In addition to the expense of treatment, this can result in lost wages and general difficulty managing other bills.

Business failures

Sometimes business ventures quickly fail or succeed due to factors that no one could predict. A classic example of this is Blockbuster’s rapid decline in reaction to Netflix’s climbing success. It’s also clear to see how Napster and other sites on the internet slashed music sales almost overnight.

On a smaller scale, a small business restaurant owner may use funds to improve the establishment’s aesthetics. However, when a chain competitor moves in and shortly after, the costly improvements may not seem as sensible.

Bank approval

One of the contributing factors to the housing crash of 2008 was that prospective homeowners were being approved for mortgages that were outside their means.

When a bank miscalculates the financial feasibility of you paying off a loan for a car, house, higher education or credit card, you’re left to pay the consequences — literally.


On average, Americans spend about $20,000 on their divorce — and they often come out on the other side with a smaller household income. Most couples don’t budget for their divorce and have difficulty with the money management and new costs that follow it.

Lay offs

When you lose your job through no fault of your own, it can be tough to deal with the financial consequences while also searching for employment.

The common theme between all of these issues is that they can pop up unexpectedly and cost a lot of time, money and energy to correct. Those who have found themselves in a similar situation should feel the blame for losing track of debt. Bankruptcy protection is an answer that can help those struggling prevent their problems from becoming worse.