Don’t Let an Accident or Illness Ruin Your Finances

Tulsa personal injury

Many people today have little or no savings, which means they are one disaster, such as a trucking accident, from facing bankruptcy. In fact, about 75% of the population lives paycheck to paycheck, meaning if they missed one paycheck, it would put them in a huge financial hole. While bankruptcy carries a negative stigma, it can be a solution for people who are overwhelmed by debt.

About 97% of all bankruptcies filed in the U.S. are personal bankruptcies. Though some people wind up filing bankruptcy simply because of poor financial management and overspending, most wind up there because of some event in their life that causes them financial hardship. This is usually caused by job loss or a medical crisis, such as a major illness or injuries from a major accident, such as a trucking accident. In many cases, the financial hardship results from a combination of issues, such as a serious illness or injury causing a job loss.

There are very few safety nets for people who get injured and lose their jobs. If you lose your job through no fault of your own, you can qualify for unemployment benefits, but those usually last no longer than half a year and provide no more than two-thirds of your income. There also are programs like workers compensation and short-term disability that will pay you a portion of your income if your injury occurred at your job. However, these programs replace only a portion of your income and will not help you pay medical bills.

If you are forced to file for bankruptcy, you have two options. You can file Chapter 7 bankruptcy, which pretty much allows you to wipe out most debts and start over, or you can file Chapter 13 bankruptcy, which allows you to reorganize your debts and establish a payment schedule that you can meet.

While bankruptcy can be the solution to your financial woes, there are some things to keep in mind. You will have to go through a means test to see if you qualify for bankruptcy and what type. There also are fees you must pay, and some debts cannot be discharged through bankruptcy, such as taxes and student loans. You also have to consider that a bankruptcy will have a huge negative effect on your credit score, although the effect will be less if you have already taken a hit because of late and missed payments.