People tend to avoid filing for bankruptcy for as long as they possibly can. There is good reason for this since it can have serious implications for your credit ranging anywhere from seven to 10 years. It is not something to take lightly. In situations where it is possible, paying off debts is always the better choice. However, there are times when bankruptcy is the only option. The following information will help you determine if it is time for you to file bankruptcy or not.
If You Use Credit Cards for Everyday Expenses
When you have gotten to the point that you cannot pay everyday expenses, like groceries, utilities, and meals, then this is a sign that you are in serious financial trouble. Not only are you racking up more debt, but you are also putting yourself in a debt spiral. You use the credit cards to make ends meet. Then, you have to use all your available money to pay the credit card payment so you need to use the credit cards again.
If You Can Only Pay the Minimum on Your Credit Cards
When you build up credit card debt, then paying only the minimum means you could owe money for decades. Even paying a very small amount over the minimum can cut those years in half. However, if you are only able to pay that minimum, then this could be a sign that you are in serious financial trouble.
If You Have Been Unemployed for at Least Six Months
Obviously, when you have been unemployed for a long time, you will be facing extensive financial problems. This is one of the most clear-cut signs that you need to look into a bankruptcy, especially if there is no sign of employment for the foreseeable future.
If You Have Had a Crisis
Sometimes, serious events and crises will put almost anyone in financial trouble. This type of issue could include a serious medical condition such as cancer, medical bills that are not covered by insurance, severe auto accidents, etc. When these types of events occur, you may find yourself in financial trouble to the point that you can no longer manage your expenses or bills. This is a common reason why people end up filing for bankruptcy.
If You Cannot Save Any Money for the Future
When people get in so much debt trouble that all they can do is pay their bills, then this could be a sign that bankruptcy is imminent. When you cannot put any money away because of your bills, then you could be putting yourself at risk. One big expense or crisis could mean the type of debt spiral that gives you no other choice than to file bankruptcy. Many people will be surprised to learn that this type of problem can happen to anyone, even if they have a job that pays decent or even good money. That’s because anyone can get in severe enough debt that repayments take up all of their income.
People may struggle with whether or not they should file bankruptcy, and you may be in that situation yourself. As a result, you need to take time and determine if this is the best option for you. While bankruptcy can be detrimental, that leads to years of credit problems, there are times when it is simply the best option. It is better to go ahead and file so that you can start rebuilding your finances. Of course, if you determine that bankruptcy is your right path, then take the time to choose an experienced attorney to help you navigate the law properly.