Our website at Leiden & Leiden has previously described the most common causes of financial distress which may lead to bankruptcy. Among those causes are divorce/separation, unemployment/underemployment, health issues and mismanagement. However, there are other, less common causes of financial distress that we have noticed in our consultations with CSRA residents which can trigger a bankruptcy filing for consumers who are otherwise in good financial shape. TEN MISTAKES FINANCIALLY STABLE CONSUMERS MAKE WHICH CAN LEAD TO BANKRUPTCY Many of these causes are relatively new as technology and deposit agreements have evolved over the last 10-20 years.

Traffic fines – Traffic fines and tickets for consumers or their family members create an immediate financial need. Paying these fees within the time demanded can compromise the ability to pay other debts, as well as routine expenses. The long-term effects are more problematic, as these traffic offenses can result in an unaffordable increase in automobile insurance costs, especially in a household with younger drivers.

Criminal defense for family members – Providing for the legal defense of family members can be catastrophic for even the most financially stable household. These expenses may include more than just attorney’s fees, as there may be investigative costs and post – conviction expenses such as probation fees, psychological counseling and substance abuse counseling which can last for years after the charges are resolved.

Constantly using overdraft protection – Having overdraft protection on your bank account can be a good safety net, but constantly utilizing it as a bridge between paychecks can generate significant fees with some banks and credit unions. If the overdrafts exceed the agreed-upon limit, the bank or credit union may remove the necessary amount to cure the overdrafts from a consumer’s bank account without prior notice, which can then make them unable to pay debts and expenses. Payments for mortgages, vehicles or other debts which are auto-drafted from the account may be returned as unpaid, causing those debts to become delinquent.

Not paying attention to auto renewals – Gym memberships, cable subscriptions, and many phone apps have a defined subscription period, and may collect their fees monthly or annually. There are also specific requirements on cancellation, usually requiring notice no sooner than 60 days before the subscription will end, but more than 30 days. If you forget to cancel an auto renewal, or do not budget for the renewal to come out of your bank account, it may cause an overdraft, or compromise your ability to pay other debts.

Financial scams/Identity theft – Romance scams ROMANCE SCAMS – A STEADILY RISING CAUSE OF BANKRUPTCY, lottery scams, mortgage fraud MORTGAGE FRAUD DURING & AFTER COVID-19, and phishing scams are not common, but the victims of the scams have the highest likelihood of filing bankruptcy. Be safe and smart about who you communicate with over the Internet, and employ data protection on any mobile devices.

If you find that your finances are not able to meet your expenses, it would be wise to seek a consultation with a bankruptcy attorney. WHAT TO EXPECT ON YOUR FIRST VISIT TO A BANKRUPTCY ATTORNEY At Leiden and Leiden, we offer a free consultation for distressed consumers in the counties of Richmond, Columbia, Burke, Jefferson, Jenkins, Warren, Glascock, Wilkes, Taliaferro and Lincoln. If you recognize yourself or someone you know who is in financial trouble for any of the reasons listed here, please give us a call before it is too late. COMMON QUESTIONS THAT BANKRUPTCY ATTORNEYS HAVE TO ANSWER FOR POTENTIAL CLIENTS