Some of the most common reasons for being broke stem from sudden, potentially unforeseeable situations, such as medical expenses, theft or uninsured accidents, that damage personal assets. As of 2014, medical costs cause the largest portion of personal bankruptcy filings, even with health insurance.Continue Reading
Loss of a job, poor or excessive use of personal credit, and student loans also contribute to overall levels of debt and monetary constraints. Those closer to the poverty line are more likely to have issues with money constraints. As of 2011, 60 percent of those claiming bankruptcy earned $30,000 or less. Those who have some college education are at higher risk for monetary issues, as the burden of student loans combined with fewer high salaries associated with a college degree increases bankruptcy risks.
Stagnation of household income can contribute to monetary problems, making it difficult to save for emergencies, as prices for utilities, food and other basic needs increase when wages do not. Divorce can also be a very expensive drain on resources; legal fees, division of marital assets and child custody can all contribute to someone being broke. Poor financial education in schools can also contribute to poor personal budgeting issues, reflecting in individuals with spending issues or bad budgeting skills.Learn more about Financial Planning
Valid reasons for a hardship withdrawal from a 403(b) retirement plan include medical expenses, education expenses, funeral expenses, purchase of a primary home, repairs to a primary home or payments to prevent eviction from a primary home, reports the IRS. Purchase of personal property does not usually qualify.Full Answer >
In calculating a person's eligibility for a mortgage, which is one of the most common reasons for calculating a personal debt-to-income ratio, lenders prefer to see a number lower than 28 percent on the back end and under 36 percent on the front end. About.com defines those terms as being your total debt ratio before and after housing costs are factored in to the equation.Full Answer >
The responsibilities of a trustee to a beneficiary include complying with the instructions in the trust document; keeping the trust assets separate from the trustee's personal assets and maintaining separate records; and investing the trust assets in fiscally conservative ways, according to WealthCounsel. Unless the trust language permits it, the law forbids a trustee from using trust assets for the trustee's personal benefit. If there is more than one beneficiary, a trustee must treat all beneficiaries equally, without showing favoritism.Full Answer >
Property and casualty insurance offers protection against property losses to the policy holder and legal liability against expenses arising from damage to the person or property of others, according to Investopedia. This type of insurance includes automobile, home, wind, flood and umbrella policies.Full Answer >