Nobody wants or plans to file bankruptcy, especially with the recent drastic changes in the bankruptcy law which makes it more difficult or even impossible for people in certain situations to even consider it. Bankruptcy is a personal thing and is also often a very emotional thing, so it is not something to enter into without a very thorough examination of your bankruptcy options and alternatives.

Consumers who find themselves in the undesirable situation of having a mountain of debt may be considering filing bankruptcy. This is not something that is a personal reflection on the person, since more often than not, this is not a sign of any type of financial mismanagement, but is more typically found to be something that was completely out of the control of the consumer, such as a job layoff when it was not expected, unexpected high medical or hospitalization bills that were not covered by one’s health insurance, a hotly contested divorce situation, or many more reasons too numerous to list here.

Although many times consumers feel that bankruptcy is a sign of weakness or a sign of defeat, many times it is the most viable option available under the circumstances. Thousands of people file every year, even though the bankruptcy laws have changed in recent years, making it much more difficult to file than it used to be. Bankruptcy can also be personally embarrassing, although it should not be.

It is interesting to note that approximately 30% of consumers filing for bankruptcy are doing so because of a divorce situation. Especially for women, even though more women work outside the home these days than ever before, many women after a divorce find themselves with more bills to pay off than their income allows. In a divorce situation, the marital debt is equally divided between the spouses. Most of the time, that debt is on credit cards that carry a high interest rate, and missing only a few payments on that, combined with the late fees assessed, can create a mountain of overdue debt that seems insurmountable.

In the case of some type of major or catastrophic event such as a major surgery or hospitalization, especially when such medical costs are not covered or have exceeded the limits of one’s health insurance, this can leave one with huge bills and no real hope of ever getting them paid off. For a major medical procedure, the costs can exceed $100,000 before you know it as well as much higher, and even at low or no interest assessed, this is something that will cause many people to consider bankruptcy to resolve.

Another common reason for filing bankruptcy is young people who get in over their financial heads with credit cards and student loans while they are in college. This is borne out by the fact that about 10% of people filing are under age 25. In this situation, it is important to note that while bankruptcy could provide relief for the credit card debt, federal student loans are exempt from being discharged by bankruptcy, so often this does not help these people.

You want to make sure you understand bankruptcy law as good and thoroughly as possible. The laws have changed drastically and filing is no longer a “do it yourself” project. The money you spend on a qualified lawyer can pay you back in spades by not making the bankruptcy more painful than it needs to be, as well as offering advice as to alternatives that you may not have considered that would be far less painful.