Filing for bankruptcy isn’t some kind of joke. While it may alleviate your debt and get the creditors off your back, it impacts your credit for years. However, deciding not to file for bankruptcy may cause more debt to pile up and might put you in a worse financial situation.
Below are some of the signs you should look out for when you should file for bankruptcy and ask for help from professional services like Loan Lawyers:
1. You’re Paying Off Credit Cards Using Other Credit Cards
There are instances when it’s never a problem to use another debt to pay off your existing debt. For example, you can get a balance transfer on credit cards for zero percent interest. You may then transfer your high-interest debt to that card and save lots of money in interest while paying off your debts.
However, even if there are cases that you pay off your credit cards with other debit or credit cards, it may still indicate that you’re in financial trouble. In this case, you should file for bankruptcy since you’re already living beyond your means.
2. You’re Struggling To Pay For Your Basic Needs
If you’re choosing which basic bills you should pay first and which ones you should put off next time, you might be spending too much of your income just to keep up with your debts, or you’re not earning enough, which has left you with lesser money to pay for your basics.
This may be the result of experiencing a sudden medical emergency or losing a job. If your debt payments get in the way of meeting your normal bills and basic needs, don’t weigh the pros and cons of filing for bankruptcy and proceed with it anyway.
3. You Have Already Spent Your Savings
If your current income is hopeless to go up anytime soon, it may be a good time to file for bankruptcy to pay for your credit. This is especially true if you’ve already used up some of your savings to pay for your bills, necessities, and other necessary expenses.
If your remaining savings are still not enough to cover for your financial problems, you must not think twice to file for bankruptcy. This may help you save some for yourself while you’re still looking for more ways to earn more and pay for your other debts. So, instead of spending all of your savings to pay your debts, file for bankruptcy instead.
4. You’re Suffering From Stress Due To Your Debt
If you feel stressed or have frequent anxiety attacks because of your financial problems, filing for bankruptcy may give you relief. The pressure of lawsuits, creditor calls, levies, or threats of garnishment can be stressful. Not having enough income or money to pay for your increasing debt may create unrelenting, ongoing stress, which may impact your overall health condition negatively. So, if you’re experiencing this, don’t prolong your agony and file for bankruptcy.
5. You’re Getting Calls From Debt Collectors
Another sign that you must file for bankruptcy is when you start getting threatening letters in your mail or phone calls from various debt collectors. This usually happens once your debts are one to three months past due. You could also get notices that past-due accounts have been reported on your credit report, charged off as uncollectable by the creditors, or put into collections.
6. You’re Using Personal Loans Or Credit Cards To Pay For Your Necessities
Other people use credit cards to pay for their necessities since they earn some rewards for spending a particular amount of money. This is fine if you’re paying off your balance monthly. But if you’re already using your credit cards just to pay for your necessities because you don’t have money, you might earn more credit card debt. This may be the reason why you must file for bankruptcy.
7. You Fear Losing Your Home
It’s a fact that you can’t discharge a home loan by filing for bankruptcy and keep your home. However, a Chapter 13 bankruptcy may give you more time to repay payments for the months you’ve missed.
Once you file for a Chapter 13 bankruptcy, your debt won’t discharge. However, it will be restructured into a kind of repayment plan instead. Typically, this plan gives you three to five years to pay back your debt. For some, that’s a lot of time to be up-to-date with their mortgage, which may save you from losing your home.
If your lender has started with foreclosure proceedings or you fear that they’re about to, it’s time to file for bankruptcy.
While bankruptcy is a smart choice for many people, you should know that there are some consequences. For example, your name and other personal details will appear in the court records, which are accessible by anybody. Also, filing for bankruptcy is a bit complicated, so it’s essential to consult with a lawyer first.