Reasons for Bankruptcies
Some of the reasons for insolvency that I have seen:
Under-capitalization
Breaches of contracts; untrustworthy associates; New York lenders
Unavoidable delay in the commencement of a new restaurant
Medical debt
Accidents and illnesses
Theft
Precipitous fall in a market
Loss of credit; change of bank officer
Credit card overuse
Making only minimum payments and not stopping use of credit cards
Following the advice of inexperienced investors
Buying into questionable tax avoidance schemes
Supporting grown children
Tuition
Not paying taxes
Trusting family members and friends without supervision
Home equity loans
Paying creditors with exempt property like IRA’s
Inadequate medical insurance
Irresponsible spending on consumables such as expensive cars
Not knowing when to stop pouring money into a failing business
Theft: scams and get rich quick schemes
Refusal to get a bankruptcy discharge when you can: not getting legal advice, misunderstanding of what is biblically permissible, false pride, unreasonable fears, not filing before a marriage, moving in with a man with significant debt before a marriage (it can prevent him from obtaining a bankruptcy discharge)
Gigolos
Highly leveraged investments
Wives working and raising children at the same time
Alcoholism, promiscuity, adultery, indolence
Excessive spending on consumables
Student loans
Impulse buying
Signing things like onerous leases, guarantees, co-signing promissory notes or signing promissory notes for pleasure items. Think: what is your name on right now?
Not reading what you are signing – or worse, thinking that it is not important
Contracting with inflexible, unfair and gouging people
Thinking that a potential spouse is honest and reliable because he or she is likeable; not checking them out
Hiring cheap lawyers.
Hiring lawyers because they are attractive and really nice rather than because they can really answer your questions and are trustworthy.
Hiring cheap lawyers
Charles Chesnutt