You have a stable job, and you get paid twice a month. But days after you receive your paycheck and take care all of your bills, you’re left with a bank account with an almost zero balance – and you don’t even know where all the money went. This has been your routine for months, and because you still have to pay rent and live, you end up acquiring debts from different people and financial institutions. You’re starting to worry that this setup will have a negative impact in your life and soon enough, you’ll be heading towards bankruptcy. You think that this kind of routine will worsen over time and will become the reason for your financial life to crumble and die.
To help you come up with a conclusion if you’re heading towards bankruptcy, read on below to know the red flags of bankruptcy you should be aware of. Once you’ve ticked any of these signs, admit defeat and make adjustments to your life immediately.
- You’re already missing a lot of payments: This is probably one of the most obvious signs that you’re heading towards bankruptcy. If you can’t pay bills the moment they are due, this might mean that your debt is already excessive and you don’t have the means of paying everything in time. This can be very worrisome for you especially if you have major obligations such an auto-loan or mortgage. Your credit card bills are also another litmus test. If you can’t handle your minimum monthly payments, you might be in big trouble.
- You don’t even qualify for debt management: For your financial woes, you can actually seek help by enrolling yourself in a debt management plan or credit counselling. In these programs, a nonprofit group or company will help you prioritize your bills, pay your debts and contact creditors to ask for available options on your behalf. But for you to sign up for these programs, you have to have assets or income to qualify; so if you don’t have any, you can’t enroll. This can unfortunately be synonymous with saying that you’ll be going through this battle alone.
- You’re getting more and more phone calls from debt collectors: You can’t remember a week that didn’t involve a call from a debt collector. It’s already common that you start your week receiving threatening letters from debt collectors and end your week the same way. Sorry to burst your bubble but living with this kind of situation is not normal – this is a telltale sign that you’re heading for bankruptcy.
- You have a hard time recovering from a major financial setback: Sure, you might be earning now, and you can still pay your bills but can you still do the same after paying an expensive medical bill or if you were to lose your job? Do you have savings to cover at least six months of your expenses? If you answered no to any of these questions, watch out. These are signs of bankruptcy that most people disregard. You should remember that savings is crucial so that whenever there are financial shocks, you can continue living.
Deciding of whether or not you’re already heading for bankruptcy is tricky. If you try to neglect the signs of bankruptcy and think that your finances are doing good, when in fact they’re not, you might face the worst case scenario in the future. To help you come up with sound decisions regarding if you should file for bankruptcy or not, it’s best you work with a bankruptcy attorney like this one here.
Prevention Is Better Than Cure
Filing for bankruptcy is not easy. The process itself is tedious and you need time just to make sure you’re going through this phase correctly. This is still excluding the fact that you have to make drastic changes in your life just so you can get back on track because if not, your career, relationships and credit score will be affected in the long run. But you don’t have to reach that stage as long as you’re wary about your present financial situation. You should pay attention to your finances, make certain adjustments to your spending and seek help if needed. It’s better for you to go through all of these precautions now rather than experience bankruptcy soon.