How to Know It's Time to File for Bankruptcy

Posted on: 27 January 2017

Few people jump impulsively into such an important action as filing for bankruptcy; more often the decision is a well-thought-out move to stave off property loss and creditor harassment. Often, people so dread the very thought of admitting that they have lost control of their financial situation that they put off the inevitable for far too long. There are several important signals that it may be time for you to make the big move, so read on to learn about them.

You are barely making ends meet. When you are struggling with financial problems, it's easy to lose sight of the bigger picture. If your income barely allows you enough to pay your bills, it's only a matter of time before disaster strikes. Not only will a car repair or other emergency bill send you reeling, but you are simply treading water and not getting anywhere near out of debt. Take a realistic look at your budget; this may be depressing, but you need to face reality. Now, deduct those credit-card bills, and see how much better your budget looks. Once you file for bankruptcy, you need never make another credit-card payment.

You are in danger of losing your home. Homes are usually the most expensive item you will ever own, and there is so much more to a home than just a pile of bricks. If you have gotten behind on your mortgage, you may now be in real danger of losing that home to foreclosure. The lender will only be so patient, and then you won't have anywhere to live. A bankruptcy filing will put a temporary stop to any foreclosure activities and give you time to get caught up (using the funds you were sending to credit cards). Depending on how badly behind you are, you may be able to save your home, so take action quickly.

You are using your credit cards to pay bills. This one can sneak up on you; you may even think you are clever for learning to use your credit cards to pay other bills (even other credit-card bills), but you are actually falling into a trap. Credit cards have interest, so what you are doing is paying your electricity bill and accruing interest on your card at the same time. Not having enough money to pay your regularly recurring bills is a big warning sign that you need to take drastic action.

If you can say "yes" to any of the above, you can likely benefit from the fresh start that a bankruptcy filing could mean. Speak with a bankruptcy attorney such as Clinger Richard S today for more information.