Financial Stress Weighing You Down? 5 Ways Of Knowing It’s Time For Bankruptcy
Financial issues can, and do, cause health problems and ruin relationships whether it’s between spouses or any immediate family member. While everyone goes through financial problems at some point in their life, debt shouldn’t keep you down forever, especially if you’re able to learn from any financial mistakes you’ve made. Sometimes, it’s actual ideal and beneficial to start over. When do you know that it is time to file for bankruptcy?
1) You Can’t Make The Minimum Payment Each Month
The first sign that you are in over your head is when you cannot make the minimum payment on your debt, I.e, car note, mortgage or credit cards. Typically, the minimum payment on a credit card is only five percent of your outstanding balance plus interest. If you’re not in a position to be able to meet these financial obligations at a minimum, it may be time to reevaluate your finances.
2) Your Debt Balance Isn’t Going Down
If you make late payments or miss payments, you could suffer from increased interest rates, late charges and other penalties. When your monthly payment barely covers these extra fees, you are not going to get out from under your debt anytime soon. Not only will your debt increase, but your credit score will get lower and lower during the process.
3) There Are No More Assets To Sell
You have the option of selling your car, house or anything else of value to settle your debt. If you don’t have anything to sell, it may be time to admit that it is time to settle for bankruptcy. It is important to understand that you can file for bankruptcy if you do have assets that you haven’t liquidated yet. Talking to someone like a Lincoln bankruptcy attorney can help you better understand what assets would be protected from creditors.
4) An Increased Income Wouldn’t Help
Earning more money can help you make more than the minimum payment to get out of debt faster. However, if you are being hit with fees and penalties each month, an increased income may not help you. At this point, it may be better to discharge your debt and start fresh. Also, an increase in income is easier said than done. Finding good paying jobs right now are hard to come by, depending on your personal qualifications.
5) There Are No Other Options Available To You
Debtors have the right to ask their creditors to forgive their debt. Another option to lower your debt quickly is to consolidate your debt. If you have already exhausted these options or your creditors will not work with you, bankruptcy could be your only option moving forward.
Bankruptcy should always be your last resort. Make sure that you talk to your creditors, try to earn extra income and sell assets if possible before filing for bankruptcy. However, if you have tried everything else, it is a valid way to get out of debt quickly. Once you are out of debt, you can start fresh and avoid the mistakes that got you into debt in the past.
April Labarron is a native of Southern California. She has her BA in English/Literature from MSJC in Menifee, Ca. She views her freelance writing, not only as a career, but as her passion. Other areas of interest include; movies, food, singing, soccer, traveling, shopping and a continuous desire for learning. She lives on her own and is accompanied by her Pomeranian named, Elvis. She currently resides in Temecula, CA.
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Category: Bankruptcy
