Signs you may want to consider filing bankruptcy
Money problems don’t typically develop overnight. They often start small with a missed bill or unexpected expense. However, that one small issue can turn into a very big problem that seems to take over a person’s life when fines, penalties and missed payments stack up.
There are many people who deal with financial struggles on a regular basis. Every month, they try to figure out how to pay a mortgage, credit card bills, utilities and other expenses, but there is simply not enough money to cover everything. For some people, these issues are short-term or isolated events; for others, there seems to be no end in sight to the financial strain.
In order to determine if debt is headed toward being unmanageable, people will want to consider some common signs that bankruptcy may be necessary to tackle debt. These signs include:
- Spending 20 percent of your income or more on paying down debt
- Being unable to cover essential expenses with existing income
- Signing up for more credit cards to pay off other cards
- Only being able to making minimum payments
- Missing payments repeatedly
- The absence of a financial safety net, including a savings account
- Receiving and avoiding seemingly non-stop calls from creditors
- Being afraid to open bills or check bank statements
Dealing with even one of these issues can be difficult enough, but when several of these signs are impacting someone on a regular basis, it could be necessary to reach out for help to tackle financial troubles.
If financial pressures and anxiety have become too intense for a person to deal with, it can be time to consider taking serious action to deal with debt. One resolution that may be a good way to do this is filing Chapter 7 bankruptcy. This is an aggressive solution that can permanently wipe out debt, and it may not be right for everyone. Discussing the details of an individual situation with an attorney can be a good way to determine if Chapter 7 or another type of bankruptcy protection is appropriate.
Source: Orange County Register, “Overextended credit and personal bankruptcy,” Cathi Douglas, Jan. 2, 2015