DavidFiling for bankruptcy is a challenging decision and should not be made lightly. However, there may come a time when it does become the best option. Here are some key signs that it might be something to consider:
1. Debt Has Become Overwhelming
If there is no realistic way to pay your debt off in a timely manner, then filing for bankruptcy may be the best option. This is because you will be left with a fresh start, and most of the negative consequences of not paying off debt will be cleared within seven to ten years, depending on whether you file Chapter 7 or Chapter 13. Many people find themselves in this situation, especially after a job loss or severe medical bills.
2. Many Missed Payments
On top of the overwhelming debt, you may have many missed payments on your bills. This is a critical sign that bankruptcy may be the right step for you as it will help relieve you of having to make those payment obligations.
3. Threat of Foreclosure or Vehicle Repossession
If your home is at risk of becoming foreclosed, filing for bankruptcy will help by stopping the process. This will give you some time to catch up on late mortgage payments. The same is true for vehicle repossession and something to consider if you are not in a position where you can lose your vehicle. Many people need their cars to get to and from work.
4. Wage Garnishment
If you face wage garnishment from creditors, filing for bankruptcy can also halt this. This is a crucial way to continue receiving your total wages from your employer, which will help you pay off late payments and fees after bankruptcy.
5. No Savings
If you are facing all of the above and have no savings, you are likely living paycheck to paycheck and need some relief to hopefully turn your financial state around to better your future and start saving.
6. Collection Calls
Many collection calls throughout the day that go unanswered can also be a sign that you need some of the relief bankruptcy can provide. This will stop the calls and reduce your feeling of daily financial stress.
7. Lawsuits
If you are facing lawsuits for any unpaid debts, a bankruptcy filing will also cease this. Facing a lawsuit is not ideal, especially if you face financial stress and cannot take time off work to deal with this issue.
8. Taking Out New Loans
If you are at the point where you feel you have to take out new loans just to pay off old ones, it’s time to consider filing for bankruptcy. Unfortunately, taking out new loans will just put you in a bigger financial hole, leading to more financial problems. Filing for bankruptcy will help you resolve this in a simpler way and be better for your financial state in the long run.
Don’t let financial stress take over your life. There are options to fix your current financial state if you are ever facing the above issues. Reach out to a debt relief expert to talk about your options for filing for bankruptcy today.