No matter what financial status you have now, knowing the signs that indicate the threat of bankruptcy is essential. Even if you’re not missing debt payments yet, things can go wrong quickly if you’re not prepared to do what it takes to avoid bankruptcy.
Here are the signs that could mean you’re heading right into it:
1. You’re missing payments
Missing payments is the first sign of financial trouble. And when debts and bills stack on top of each other, it can very well lead to bankruptcy.
If you’re having trouble keeping up with payments, or are already missing some of them, it’s time to review your debt. For example, you can consolidate your debt to pay off existing obligations and possibly lower monthly payments. Some people also make minimum payments on their debts to avoid incurring late fees.
However, if you’ve exhausted your options and still have trouble paying debt, you can talk to a reputable debt relief lawyer in Salt Lake City or any other city next.
2. You have maxed out your credit cards
Another obvious sign that you’re risking bankruptcy is if you’ve already maxed out your credit cards mainly because of paying debts. When this happens, you have even more debt on top of your current financial obligations. And if the weight is too much to carry, filing for bankruptcy is a viable option to help you get a fresh start.
3. Your daily living is compromised
When you’re no longer able to buy enough groceries for your family, fill up your gas tank, or live without constantly thinking about money, filing for bankruptcy may be in the near future. Although a lot of cash-strapped families can get by, compromising your family’s quality of life may not be worth avoiding bankruptcy at all costs.
4. You’ve exhausted all your other options
Your emergency fund and savings may keep you afloat for some time, but when your debt doesn’t let up by the time they run out, you may be looking at imminent bankruptcy. The same goes for your assets, whether liquid or not. If they run out as well, filing for bankruptcy might be your only chance of staying afloat.
5. You are facing foreclosure
Having mountains of debt can have you prioritizing some payments more than others, including your mortgage. If you miss your mortgage payments so that you can pay for your credit cards, personal loans, and other financial responsibilities, your home might be at risk of foreclosure, which, of course, no one wants. Hence, filing for bankruptcy before you get a foreclosure notice is better than losing your home entirely.
6. You are being chased by debt collectors
Are you getting incessant phone calls from debt collectors? Are they sending you final notices? Or perhaps already filed a lawsuit against you? When you find yourself in this situation, it’s a telltale sign that it’s time to find debt relief.
Knowing when to file for bankruptcy is better than going over the tipping point and losing everything you have. If you see these warning signs of bankruptcy, contact a bankruptcy lawyer or a debt relief attorney right away.