Many individuals consider filing for bankruptcy an unsavory last resort – preferring, rather, to battle endlessly in the face of mounting debt. Unfortunately, this becomes an endless spiral. However, the Bankruptcy Code was designed to give hardworking Americans a chance to eliminate various forms of debt while securing a more stable future.
In general, if you are seriously considering bankruptcy as a financial option, you likely should have filed several months ago. Here are some common signs that you should take this step and ease your financial burden.
- You are missing payments … on purpose: It is not uncommon to miss a payment or send a check in late. However, when you begin sacrificing one bill to have sufficient funds to pay a different bill – bankruptcy might be the correct option for you.
- You are seeing the start of creditor harassment: Creditors will often enlist the aid of collection agencies to recover funds from debtors. These agencies typically use a barrage of communication methods to seek you out and wear you down. From constant phone calls to threatening letters, you might experience troubling communication.
- Your credit cards are maxed out: Most people have multiple credit cards and many individuals keep an emergency card in the back of their wallet to only use when absolutely necessary. When you notice that all your cards have reached their credit limit, it might be time to examine your spending and explore the options available to you.
- You use one source of debt to pay for another source of debt: It is not uncommon to rotate debt, but when you are paying bills with credit cards and have limited ability to pay off the new debt, you might be facing insurmountable debt.
- You cannot afford a personal financial setback: Many people struggle through job loss, home repair, divorce or a medical emergency. Few people have the ready funds necessary to recover from thousands of dollars of unexpected debt. Bankruptcy might be a way to get out from under this debt and start fresh.
While a bankruptcy might ultimately hurt your overall credit score, it gives you the chance to carefully build a more stable future. From developing a strong, effective budget to building your credit back up through secured credit cards, you have options after Chapter 7 and Chapter 13 bankruptcy to avoid devastating situations you have already experienced.
To learn more about how bankruptcy can benefit you, have an experienced lawyer thoroughly examine your unique financial situation to provide options.