Daria was always very responsible with money. She was raised to save in advance and pay cash for items you want. The only debt she was comfortable taking on was for a home mortgage. She and her husband Jim worked two jobs to support their family and managed their money wisely. But when her youngest son was in a car accident the insurance didn’t pay for any of his long-term rehabilitation treatment. Medical costs quickly mounted and the couple began putting charges on their credit card after they ran through their small savings funds. Now the family is looking at more than $10,000 in debt and has also lost Daria’s income for several months while she takes a leave of absence to care for her son.

Job loss, having no or inadequate health insurance combined with catastrophic illness, divorce, unmanageable credit card debt, property loss, small business failure and disability are often cited as the biggest life events that drive people to the point of unmanageable debt and potential bankruptcy. It’s easy to understand why:

They all cost money. The costs associated with a significant or traumatic life event can be staggering. Not only can the initial emergency needs be expensive, but also permanent life changes such as divorce or a catastrophic medical event causing a long-term disability, can have far-reaching effects on people’s income as well as expenses.

They all represent a potential loss, or elimination of, income. Job loss is the most obvious. However, divorce and medical expenses can have a dramatic effect on an individual’s or family’s income. For example, if a working couple divorces they obviously lose the other spouse’s income. However, when a single-income couple divorces there are now two households to manage on the same single income that used to support just one household. In the case of a medical emergency or long-term illness of disability, depending on the worker’s ability to work and insurance coverage, the family can be quickly faced with losing all or a substantial portion of income.

They can all affect your personal and financial timeline in unforeseen ways. Obviously something that happens instantly, like losing a spouse or having an accident can change your life, and your finances, immediately. However, almost all big life changes have financial implications that can sneak up on you more quickly than you may anticipate. Often recovering financially and otherwise from such changes takes longer than you hope it will. Being out of work for a few months, being late on your mortgage or credit card payments, falling behind on student loans…it can be easy to ignore the embarrassment or fear of money troubles by throwing away the letters you’re getting from lenders or bill collectors. But ignoring the problem – or wishing and hoping that it will get better fast enough so you won’t have to do anything differently except keep stretching and juggling your finances and yourself thinner and thinner – won’t work. When it comes to financial debts, the truth is that ignoring them or not taking any steps to deal with what is happening will definitely just make your situation worse and take more work to resolve.

Significant life changes can mean that unforeseen expenses may add up quickly. With or without adequate insurance or savings, doctor bills, lawyer’s bills, child support payments, prescriptions, and a host of other one-time, chronic or newly required everyday living expenses can quickly push someone to the financial brink.