They don’t teach finance in most schools. So it is no surprise that so many Americans have problems with their finances in adult life.
While bankruptcy could happen to anyone, certain things could make it more likely to happen to you.
Co-signing for things
Co-signing often seems like a great way to help a family member out if their financial situation is not strong enough for them to get what they are after, such as a rental contract or a car. Yet you should remember that it may not take much to unbalance whatever financial stability they have. And, if you cannot step up and cover the payments they promised to make, the lender may come knocking on your door, expecting payment, whether you can afford it or not.
Not building up a reserve of cash
Life will almost always throw financial twists and turns. Maybe you freelance and work is going great. Then, from one day to the next something hits the industry you work in and scuppers your bookings. If you did not put away some savings while you could, or took out loans or mortgages based on how fantastically you were earning at the time, it could leave you with no leeway to survive the lean months.
Of course, it is not always possible to build up reserves of cash, as it can be tough enough just to make enough to live week to week. But it’s worth doing if you can. Accidents or health problems can also hit you out of the blue, as can redundancies and so many more things that will stress your finances and possibly leave you at the point of bankruptcy.
If you do reach this point, learning more about how bankruptcy works could be a wise next step. Experienced legal guidance can help.
