Eight (8) Factors That Contributes To Personal Bankruptcy

Eight (8) Factors That Contributes To Personal Bankruptcy

In 1996, “a record 1.2 million Americans filed for bankruptcy, up 44 percent from 1994,” states Newsweek magazine. “Bankruptcy has become so much common that it’s lost it stigma”. It’s pertinent to note however that bankruptcy filing is not limited to America alone. It’s spread like a pestilence that can infect people who do not even leave close to each other. From England to Australia and from Canada to Norway, bankruptcy rears its ugly head. In many western lands, bankruptcy has become the route many take to have “a fresh start.

Why the rise? Is it due to insufficient pays? “Creditors say the attitude shift is leading to abuse: one study says 45percent of bankruptcy filers could pay much of their debt”. Thus, some see bankruptcy filing as just start afresh. They are also influenced by lawyers’ ads to “solve your debt problems quickly and easily”. As the number continue to rise during economic boom, experts shudder to comment on what might happen if there were a market crash or slump. The above reasons is certainly inadequate to explain why bankruptcy is sky rocking today. Then, what other factors are responsible?

Abuse of credit card.

Robert had only a small student loan to pay off when he married Rhonda, and she had only car payments. Robert says: “we both work full-time and between us we made $2,950 per month. But were not getting anywhere” Rhonda Noted: “we had not make any major purchase or done anything outlandish. I just could not understand where our money was going”. Did their money disappear? Are they defrauded? No. Robert related that in their first year of marriage they had $14,000 on their credit card. At the end of the second year they had $6,000 debt on their credit card. Thus, the money was actually spent. With your credit card, you can make purchase, purchase and purchase anything that comes your way. You don’t see the cash coming out; the card takes care of it. It is as if you don’t spend, while in actual sense you pay for every thing you purchase. Therefore, those who fail to make prudent use of their credit cards invites insolvency.

Smoking.

Ira 53 years old has emphysema – the results of nearly forty years of smoking. To treat his condition, he needs a steady supply of bottled oxygen, costing about $400per month. In 1994 he was hospitalized for nine days when his health deteriorated. His hospital bill total eighteen thousand (18,000) US dollars. In all during that single year he spend about $20,000 on his condition, all resulting from smoking.

A study in the United States o f America found that babies born to mothers who smoke have twice the risk of developing cleft lips or palates “a condition that requires up to four surgeries before age of two”. The average lifetime cost for medical care and related expenses for this condition is one hundred thousand (100,000) U.S dollars per person. What happens if a woman has two issues affected? And what if a bankrupt receive a gift of $200,000? Will his condition remain the same?

In the United States alone the annual health-care cost for smoking related illnesses is estimated to be $50 billion. This shows that smoking is a major contributory factor to bankruptcy.

Abuse of alcohol

While moderate use of alcohol may be okay, alcohol abuse has been linked to a number of health problems, including cirrhosis of the liver, heart disease, gastritis, ulcers and pancreatitis. Some infants have been diagnosed with fatal alcohol syndrome (FAS), often this “suffer physical and mental impairments”. The estimated average lifetime medical care for FAS child is $1.4 million.

Under the influence of alcohol, abusers flout traffic rules; exceed speed limit, and some goes to the extent of sexually molesting children. Every year damages resulting from these crimes are substantial enough to plunge one into financial crisis and ruin of bankruptcy.

Drug abuse.

One researcher estimated the annual cost of drug abuse the United States to be sixty seven (67) billion U.S. dollar. In addition to health care cost most abusers become lazy, report late to duty or absent from work without official permission. This often put their job in line. They pay enormous fine and damages resulting from uncivilized behavior under the influence of drug.

Promiscuity

More than 12 million persons in America contract sexually transmitted diseases (STDs) each year giving the United States one of the highest rate of STDs among developed countries. Direct cost excluding AIDS runs into billions of dollar every year.
Besides heath care cost, promiscuous individuals, suffer broken marriages leading to divorce. In most cases the offending partner, in addition to divorce benefits are awarded substantial damages.

Gambling

“Around 290,000 Australia are problem gamblers and account for over and 3 billion U.S. dollars losses annually. This is disastrous not only for these problem gamblers, but also for the estimated 1.5 millions people they directly affect as a result of bankruptcy ……….” Howard, prime minister of Australia, 1999. One gambler recall that he sometimes gamble away his whole paycheck, and had nothing left to pay the mortgage or to take care of the family.

This article has really X-tray how unhealthy lifestyles, attitudes and behaviors contribute to rise in bankruptcy filing today. It only a course of wisdom therefore, that all learn from this series. This includes those who are already bankrupt, smokers, gamblers, and those who sees smoking and gambling as glamorous, please don’t smoke and do not gamble.