If you are considering filing for bankruptcy, it might be prudent to act quickly. Declaring bankruptcy can stop a potential repossession, foreclosure or wage garnishment. Simply put: bankruptcy can offer much-needed relief when you are overwhelmed with debt.
By declaring bankruptcy as soon as you possibly can, you will get the “breathing space” you need to regroup and start afresh. Here are three telltale signs you need to give bankruptcy a serious thought.
You are routinely missing payments
This is perhaps the most obvious sign. If you are unable to pay your bills on time, this could be indicative that debt is weighing you down. It is specifically worrisome if you are struggling to honor major obligations like servicing your mortgage or car loan on time. Delay in paying your credit card bills is another warning sign.
You are struggling to recover from a major financial setback
Most American households do not have an emergency cash reserve on the sidelines. In fact, according to the Financial Industry Regulatory Authority (FINRA), nearly 50 percent of Americans cannot scrape together enough cash to see them through three months. That explains why major life events like a divorce or a job loss easily push people into bankruptcy.
You are facing a lawsuit over your debts
If you are facing a lawsuit over an unpaid credit card debt, debts over a breach of contract, unpaid medical bills or unpaid loans, you may consider declaring bankruptcy immediately to stop the suit. After all, it does not make any sense paying to defend against these lawsuits when you are already unable to pay.
Bankruptcy can be a valuable tool when you want to recover and move on from debt in a responsible manner. Careful and deliberate education, planning and commitment are the keys to getting back on your feet after bankruptcy.