Not all money problems that lead to bankruptcies are a result of financial irresponsibility. In far too many cases, unexpected setbacks like divorce or job loss create crisis. However, one catastrophe seems to create the most serious financial shortfalls.
Health problems. Studies show that an estimated 62 percent of individual bankruptcy filings in the United States were the result of medical costs.
The most financially responsible can find themselves at the mercy of creditors when an unexpected illness or injury arises. They quickly blow through savings, credit cards and other forms of payment just to cover costs and make ends meet.
There was a time where, friends, family members and neighbors would band together and organize fundraisers that included bake sales and car washes. Today, in the digital age, crowdfunding has become a way to help people pay medical bills and avoid the specter of bankruptcy.
GoFundMe and other online platforms have helped millions raise more than $3 billion for a variety of causes, including assistance with medical costs. While benefits exist in providing not only financial and emotional support, some claim that it provides an unfair advantage to individuals who are more technically skilled and savvy, enjoy broader social networks, and are more photogenic.
The sheer growth of social media-driven fundraising is increasing competition among campaigns. Those in financial peril and their loved ones may face challenges in writing compelling and convincing appeals to make personal connections. Some are better than others in conveying in written form the significant need for monetary support.
In medical terms, crowdfunding may be placing a band-aid on a more severe wound. Medical costs and health insurance premiums have skyrocketed over the past few years. While the future of insurance coverage remains in flux, more people in need of both medical care and financial support to pay for it can attempt crowdfunding as a last resort to stave off aggressive collection actions.
While exploring all forms of debt relief is necessary, putting off a bankruptcy filing can only make a bad situation worse.