Bankruptcy number shave increased in the last few years, largely due to spikes in unemployment and drops in property value. Filing for bankruptcy is unfairly disgraced because of the capitalist notion that one ought to be able “to pull themselves up by their bootstraps;” however, this is not always an option. Bankruptcy is a great way of making your debt more manageable.
Indications that you may need to sign for bankruptcy
Unable to obtain health insurance
The health and wellbeing of you and your family should be a top priority. If you are currently living without medical coverage, you may want to reorganize your spending priorities and obtain coverage or begin to investigate your financial situation seriously.
Maxing out credit cards
It is recommended that people only spend 30% of their allowed spending on their credit card. Any more than this may indicate that you have a spending problem. Maxing out your card means that you will collect a hefty amount of interest on top of what you already own.
Owning more than three credit cards
Compulsive spenders often obtain multiple credit cards so as to spread out their debts; however, this is fallacious reasoning. If you own more than three credit cards, the likelihood that you will spend beyond your means is high.
If you are unable to pay your bills on time because you are living paycheck to paycheck, this is a strong indicator that you are currently “in the red,” or, owe more than you own.
Over-using home equity loans
Over borrowing on the equity of your home is a risky endeavor and may compromise your financial future.
Writing checks when the money isn’t there
This is something that most everyone has done from time to time. Your bill is due on Tuesday, but you don’t get paid until Friday. So you write the check, put it in the mail, and hope that by the time the check clears, you’ll have your paycheck. The time it takes for a check to clear is much shorter than it used to be. Checks can often clear overnight, and if the money isn’t there, you can be assessed late fees by both your bank and the payee. As a bonus, we should point out that it’s illegal to write a check when you know that the money isn’t in your account.
These are just a few things that might be warning signs of serious financial trouble. When you find yourself doing one or more of them on a regular basis, it’s time to take a serious look at your total financial situation. Now might be an excellent opportunity to sign for bankruptcy.