Law Office of Gordon Mosley
The top cause of bankruptcy has nothing to do with personal fault
On Behalf of Law Office of Gordon Mosley

A surprising number of people see bankruptcy as a sign of personal failure. There is a lot of assumptions about what leads people to file for bankruptcy. There are certainly people who file because they spent too much on their credit cards or develop a gambling addiction, but those people are actually in the minority of filers.


Modern bankruptcy statistics show that one issue dominates as the primary reason that people eventually file for bankruptcy. Roughly two-thirds of those in need of bankruptcy reported medical issues as the triggering event that led to their bankruptcy.

Modern insurance leaves a lot of gaps

Those with health insurance through their employer usually assume they will have the coverage they need if they get hurt or become very sick. Given how rarely people need catastrophic coverage, it’s understandable that so many people don’t understand how vulnerable they are.


Many insurance policies have deductibles that are thousands of dollars. You will have to pay all of that out of pocket before the insurance company starts covering your care. Even once they do start paying, you will likely also have coinsurance, which makes you responsible for a percentage of the total cost, sometimes as much as 30% or more. There may also be co-pays.


Some insurance policies also have a maximum benefit, meaning that after you require a certain amount of care, they won’t pay for anything else. Additionally, cutting-edge treatments for cancer or injuries may not have full coverage. One car crash that causes a spinal injury, one fall that leads to a brain injury or one cancer diagnosis could be enough to leave someone with hundreds of thousands of dollars in medical debt.

Medical creditors can be downright aggressive

Hospitals and medical practices may have to provide care to save your life, but they don’t have to think about how the stress of their aggressive debt collection practices might impact your recovery. They could sue you, place a lien against your home or even try to garnish your wages when you get back to work.


Some people beat cancer, only to wind up with six figures worth of debt afterward. Others get hurt in a car crash and have a lifetime of both medical expenses and reduced earning potential. Those dealing with aggressive medical collection tactics or just overwhelming levels of medical debt may find that personal bankruptcy offers them the fresh start they need to enjoy their life after they recover from their medical issues.

Facing garnishment, lawsuits? Bankruptcy may be able to help.

By On Behalf of Law Office of Gordon Mosley • 21 Feb, 2022
During the day, you may have the ability to keep your financial worries somewhat at bay by concentrating on other tasks. However, when the time comes to get in bed for the night, those thoughts that stayed at the edge of your mind all day may come flooding forward. How will you make your next credit card payment? When will the next creditor call? What can you do about your garnished wages? These concerns affect numerous people who must contend with overwhelming debt. No matter what led to your debt, you do have options for effectively addressing those liabilities. In particular, bankruptcy may act as a significant step toward a fresh financial start. However, you may wonder whether taking this action really suits your circumstances. Has action been taken against you? When you face overwhelming debt, you may also face letters and calls from creditors every day. Over time, you may have become adept at avoiding these attempts at contact or requested a stop to such actions. However, more significant actions may have been taken against you with which bankruptcy may be able to help. Two actions that may make you consider this debt relief option more seriously include: Wage garnishment: If creditors are directly garnishing wages from your paychecks in attempts to pay your outstanding balances, you already face serious financial trouble. You may need every penny you earn to make ends meet as it is, and when you cannot hold on to your wages, bankruptcy may be able to help stop garnishments. Lawsuits: When creditors feel that they cannot effectively get you to pay your balances on their own, they may sue you for payment. Lawsuits are serious matters that could cause you to face even more financial strife while also facing orders to pay your liabilities. Fortunately, bankruptcy could help stop judgments in such cases. Because these actions can have serious outcomes, taking steps to stop them may help you in the long run. Can you attempt other debt relief methods? If you are not yet facing wage garnishments or lawsuits, you may wonder whether you could first attempt other actions before bankruptcy. Certainly, creditor negotiation and credit counseling could act as possible avenues to try. Of course, not all creditors feel willing to negotiate, and you may still need to address your full balances. Additionally, you may want to remain wary of services which claim they can reduce your debt or help you become debt free as many of these claims turn into scams that cost unsuspecting individuals more money. Though it can be frightening to consider such a major action, exploring your bankruptcy options further may help you get your financial affairs in order and bring back your restful sleep.

Seeking debt relief does not make you a bad person

By On Behalf of Law Office of Gordon Mosley • 21 Feb, 2022
No matter what you do, you just can’t seem to get your head above water financially. In the last little while you’ve experienced loss of income, or you’ve had unexpected emergency expenses that you had to put on credit cards, or you or a loved one may have suffered a serious medical event, costing your family a small fortune. Maybe it was a combination of these or other hardships. Now you need help, but feel you are a bad person for seeking debt relief. There is and always has been a certain stigma surrounding bankruptcy in the United States. The truth of the matter is, Texas residents who need financial help are not bad people and no one should make them feel bad for asking for help. It is their right to pursue bankruptcy if it is what will best serve their interests. Stigmas attached to bankruptcy There are three types of stigmas often associated with bankruptcy. These are: Financial Emotional Social Emotional and social stigmas are often combined. They refer to how you see yourself after pursing a bankruptcy filing and how you believe people view you. People are afraid to let others down or do not want others to know they are struggling. When drowning in debt, the only thing that should concern you is fixing the situation. It shouldn’t matter how you do it and it really is no concern of anybody else’s. You do what will best serve you. The financial stigma sounds bad, but it can be a good motivator. Will your credit score go down if you file for bankruptcy? Yes. Will it stay that way forever? Will you be financially doomed for the rest of your life for seeking relief? No. While credit recovery after bankruptcy can take time, it is possible to do if you take full advantage of the bankruptcy filing and are cautious in your future financial decisions. Don’t let the stigmas stop you At the end of the day, you have to do what is best for you and your family. That may involve pursuing a bankruptcy filing and that is okay — it does not make you a bad person. Don’t let the stigmas stop you from seeking the relief you need. If you are not sure if it is the best course of action, you can seek legal counsel on the matter and then go from there.
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