Introduction

-Bankruptcy is a legal status of a person or business that is unable to repay debts to

creditors. It is a difficult situation for many young people and can have a long-term financial
impact on their lives. It is important to understand the underlying factors that lead to
bankruptcy among young people in order to help them avoid such a situation. This essay will
explore the various factors that contribute to bankruptcy among young people and discuss
potential solutions to help prevent it.

Causes
The causes of bankruptcy among young people are varied and complex, and can be divided
into two broad categories: financial and non-financial.

Financial Causes
-The most common financial cause of bankruptcy among young people is poor financial
management. Young people often lack access to financial education, which can lead to poor
budgeting habits and poor understanding of credit and debt. Poor financial management
can lead to overspending, which can quickly lead to unmanageable debt.

-Another financial cause of bankruptcy is unemployment or underemployment. Young

people are often unable to find stable, well-paying jobs, leading to a lack of income to pay
off debts and creditors. This can quickly spiral out of control, leading to bankruptcy.

Non-Financial Causes
-Non-financial causes of bankruptcy among young people are often overlooked, but can be
just as important as financial causes. One of the main non-financial causes of bankruptcy is
poor decision-making. Young people, who lack the experience and wisdom of their elders,
often make poor decisions when it comes to money. This can lead to poor decisions about
taking on debt, overspending, and even gambling.

-Another non-financial cause of bankruptcy is family problems. Financial difficulties within a

family can lead to increased stress and financial hardship, which can lead to bankruptcy.

-Finally, mental health issues, such as depression and anxiety, can also contribute to
bankruptcy. Mental health issues can lead to poor financial decision-making and an inability
to keep up with debt payments.

Potential Solutions
In order to prevent bankruptcy among young people, it is important to focus on both the
financial and non-financial causes of bankruptcy.

-On the financial side, it is important to provide access to financial education and resources.
This can include teaching budgeting skills, understanding credit and debt, and providing
resources to help young people find and maintain employment.

-On the non-financial side, it is important to provide resources for mental health and family
issues. Mental health services should be made accessible to young people, as well as family
counselling services to help address any underlying family issues.
Conclusion
Bankruptcy can have a devastating effect on young people and their future financial
prospects. It is important to understand the various factors that lead to bankruptcy among
young people, both financial and non-financial, in order to help them avoid such a situation.
By providing access to financial education and resources, as well as mental health and family
services, young people can be better equipped to manage their finances and avoid
bankruptcy. Understanding the causes of bankruptcy among young people is the first step
towards preventing it, and can help ensure a brighter financial future for the next
generation.