There could be many reasons that can lead a firm or an individual to the steps of bankruptcy.
The expensive medication, grocery, healthcare facility, high rate of power supply, and travel expenses have increased cost of living in states. The high maintenance costs of societies are difficult to pay by small families. The daily expenses are rapidly increasing. The high school, tuition, and coaching fees have made parents think of the education of their children.
California is a state of business startups. Every day new businesses start by making huge investments. But the current scenario of the world has led to the slow economic growth of the countries. hIgh operating costs leave no other option than closing down everything.
The huge investment in the business and new works require huge capital and borrowings. The increasing interest rates and high installments are difficult to pay back. There are many external factors that contribute to a low return on investment. All these things pile up bills and payments of the firm or an individual. Many times the owner gets stuck in the vicious circle of the debt trap.
These are the major contributors to the bankruptcy of a person. Here, a person represents an individual, business owner, partner, firm, or company.