Life can be tough and unpredictable whatever optimistic you are. Seeing your future bright and wealthy is a good thing, but being realistic about the current financial situation is even better.
Bankruptcy is unfairly perceived as a dead end in terms of financial and social life, while it is a totally wrong idea. Filing for bankruptcy may become a long-awaited relief that allows you to start your life from the blank sheet and reconsider your relationships with money.
If you have some loans then you need to make your monthly payments in time in order to escape penalties and fees. Unfortunately, many people struggle to pay loans back by giving out their last money and thus having no funds for decent living. Even if you do not consider your situation bad enough to file for bankruptcy, the reality check may show you are one step away from it. Take a look at these most important signs that indicate its’ time to make a call to a bankruptcy attorney.
1. Paying one credit card with another
It is one of the most common debt traps people let themselves to be involved in. Having no funds to make payments under the previous loans, they have their interest rates increased and penalties charged. In order to avoid it people get another loan with the purpose to repay existed loans (at least partially). All that turns into a never-ending circle of debts that usually ends up in getting a consolidated loan or (if that didn’t work) filing for bankruptcy. If you already see this situation coming – take preventive measures by getting professional advice from the bankruptcy attorney.
2. You lack money for everyday expenses
If you notice that you can’t already pay for simple daily necessities and you cover those expenses with your credit card, you have to tell yourself honestly: it’s time to find a new or additional source of income. If that is impossible and you do not foresee any other source of funds coming to your rescue – ask yourself, maybe it is time to get rid of your debt burden.
In your case, you should opt for bankruptcy under Chapter 7 that is an immediate liquidation. No worries: after going bankrupt under this Chapter you will still be allowed to keep everything you need for living your life: clothing, a car (under 2-3K dollars), and other everyday necessities.
3. Your salary is not enough to make monthly payments and you already have two jobs
In a case you already have two or even three jobs and you don’t expect your salary to be raised in the nearest future while you still lack money for daily life – it is definitely a sign to prepare for filing for bankruptcy.
4. You start feeling depressed sure to stress related to debt burden
If you start feeling the debt burden affects your daily state of mind and emotions the way it damages your productivity at work, it’s clearly a sign you need to file for bankruptcy. The thing is this trap will suffocate you more and more and the worse you’ll feel about it the less efficient you will perform at your work which eventually may lead to the loss of your job. It is always better to not to allow bankruptcy become an urgent measure in a critical situation. Make a reasonable and wise decision to file for bankruptcy in advance, when the situation is still bearable.
5. You face fees and penalties due to delayed payments
If you start delaying payments because of lack of money you will definitely face fees from the lender that will make the size of your debt even bigger. Day-by-day it will turn into the avalanche of fees and delayed payments so chances are it will lead to your collateral extermination. If your loans are unsecured you will probably have no other choice than filing for bankruptcy under Chapter 7.
6. You don’t see any alternative way to repay the debt
Before taking a decision about filing for bankruptcy you may try alternative ways to save your financial status. The first obvious way is to find an additional source of income. The second way is to try consolidated loan when all your loans are summarized and turn into one loan with lower interest rate and smaller payment. If that doesn’t work as well and you don’t foresee any help from your family members, then bankruptcy is your best option for now.
Actions to take when you already sure you are getting close to bankruptcy
Ok, you have decided to file for bankruptcy in the nearest future. Your first smart moves are:
- Prior to filing start saving some money for a good bankruptcy attorney. It may cost you around 1000-1500 dollars but it is totally worth it. The really good attorney is almost a guarantee you’ll succeed with bankruptcy and you will be allowed to keep the lion part of your belongings and even a house you live in.
- Stop paying utility bills and make partial payments on your unsecured loans. If you are ready for bankruptcy – do not spend money on paying bills as after your application is accepted by the court your lenders or collectors are prohibited from following or disturbing you. Better spend that money for attorney’s services.
- Don’t get tempted by the idea of moving your valuable assets somewhere else right before filing for bankruptcy, as these actions will be revealed and your bankruptcy application declined. Moreover, you’ll be charged by the court for fraudulent actions. The same is fair if you are about to receive considerable financial help or valuable assets and you file for bankruptcy without mentioning that.
Remember, the next time you are allowed to file for bankruptcy under the same Chapter is in six months.