|
 |
Home >> Bankruptcy
Financial Signs that Bankruptcy Might be in Your Future
Sign #1: Your Expenses Exceed Your Income
If your expenses exceed your income on a regular basis, then you might need to consider bankruptcy. However, this test can be one filled with false positives. For example, if your expenses exceed your income because you are not using a well-planned budget, then obviously financial planning would be a better solution than bankruptcy. Consider also your current income. For example, if you are currently struggling, but know that you have a job waiting after graduation from college, then you should try to hold on until your salary increases. On the other hand, if your income is unlikely to change, you have already worked with your budget to eliminate any excess spending, and you still can't make your monthly bills, then something has to give. Your only option may be bankruptcy.
|
|
Sign #2: Any extra expenditures cause other bills to be paid late.
Sure, everyone cringes when their car breaks down or when a child needs a large amount of money for a school function, but if these ordinary but extra expenses cause you to become behind in paying for your housing, your vehicle, or even a credit card, then you need to consider some drastic measures, especially if this pattern repeats itself continuously. Everyone has a few bad months, following an illness, a lay-off, or a temporary cut in income for example. However, if these extra expenses always cause you panic, then you may need the help that only bankruptcy can give.
Sign #3: You pay only the minimum on your already maxed out credit cards.
If all of your credit cards are maxed out, and you can only afford to pay the minimum, then you should begin considering your alternatives, including bankruptcy. The first step, of course, is to quit using your credit cards, but if bankruptcy really is a viable alternative for you, chances are you depend on the tiny percentage of available credit on your cards in order to survive. Unless you expect to receive a change in either your income or expenses in the near future, you should probably consult a professional about bankruptcy. The longer your credit cards continue to build up, the harder it will be to pay them off. Even more importantly, if you are missing payments continuously, you are still taking hits on your credit report. In other words, bankruptcy might not be that much worse for your credit than a string of late payments over a long stretch of time.
Sign #4: You are receiving endless collection calls on a routine basis.
If you are already receiving calls for failure to pay a bill, then you should figure out why your bills are unpaid. If you are simply forgetful or failing to stick with a budget, then you should rectify the situation by setting up automatic payments or using a cash only system, but if you are behind because you simply don't have the money to pay the bills, then you may need to consider bankruptcy. When determining how bad your financial position is, consider the number of bills you are behind, and how long it would take you to get and keep them current. The number of bills and the amount of time should give you a clear indication of your financial health.
Sign #5: Even after careful planning, your bills still keep you up at night.
Although not as concrete as the other signs, stress over bills can be an indication that all is not well in your financial universe. Everyone stresses over bills sometimes, but if the anxiety from not being able to pay your bills keeps you up at night or affects other aspects of your life on a regular basis, then you might consider bankruptcy. Although bankruptcy will not offer a quick fix by any means, it might allow you to gain control over your debt.
Of course, keep in mind that these are only considerations for whether bankruptcy might be a good solution for you. Only a trained attorney can offer you guidance based on your unique financial position. However, if you are experiencing multiple signs from the above list, a call to an attorney might be helpful.
|
Published on BankingQuestions.com 9/21/08
|
| |
|
Accounts
Article
Q&A
Podcast
Video
Blog
Discussions
PDF
Powerpoint
