John H. Ruby Bankruptcy Law Blog on Lawyers.com

How to Avoid Bankruptcy in Louisville

Tuesday, November 23, 2010 by John H. Ruby

While debt can result from not making enough income to meet basic needs, the fact remains that an increasing number of both affluent and lower income families today consult Louisville bankruptcy law firms to help them face debt issues.

Emergencies create financial distress

Unpredictable events cause financial distress—divorce, job loss, scarcity of employment opportunities, car accident, failing health along with lost wages, and mounting medical bills, to name a few. The debt-income ratio becomes imbalanced in emergency situations.

Out of control spending

However, controllable factors also lead to bankruptcy. We live in a consumer based society. During affluent times people had extra money to spend and the United States overall experienced decades of prosperity. The average family of the 1950’s went from a one spouse provider/one car family to both spouses working and a two car family. The marketing industry geared up to keep consumers buying. Financial trends emerged to buy products on credit. Spend money before you make it—which worked fine—up to the point where the bubble burst, and you were not making the same or a greater amount of money.

Over-extending credit takes on many forms—buying homes, cars, appliances, and other products you cannot afford. Spending every dollar you earn or living beyond your means creates financial stress. And stress leads to failing health, compounding the debt problem through lost work, more lost income, and medical expenses.

An experienced Louisville bankruptcy lawyer will consult with many people struggling with heavy debt, understanding the problems that lead to insolvency.

Statistics on financial distress

Surveys done by nationally known companies (MetLife, Principal Financial, American Express, Cigna, AARP, Caravan, Roper, and Gallup) reveal that 30 million workers in the United States—one in four—are suffering serious financial distress, often living paycheck to paycheck.1

How to avoid bankruptcy?