Filing for bankruptcy is no joke. It is a last resort type of thing that people only consider when they have exhausted all other alternatives. Sure it can alleviate debts, and get creditors off your back, but it also has some negative impacts.
Other than the stigma it carries, bankruptcy will ruin your credit for at least ten years. Rather than second-guessing the decision, consider some of the visible signs that you should file for bankruptcy.
- You spend more than you earn regularly– do you find yourself adding on to your debt each month? You have reduced your spending to the bare minimum and made all-out efforts to cut off all luxuries. If this is what your life is like, then you are only not making enough money and instead are digging yourself into a deeper financial hole. Debts gain interest which increases the amount of money you owe each day. In this case, it is time to file for bankruptcy.
- Creditors and collection agencies are always on your back– many creditors will pass your account over to collection agencies when they notice that you are delaying payment. These collection agencies will have agents calling you regularly. When you start avoiding their calls and release that you cannot afford to pay creditors back, then it may be time to file for bankruptcy.
- You have spent all your savings– your savings are meant for putting your kids through college, retirement, and generally the future. If you have spent your savings on paying bills, trying to pay back your creditors, and household expenses, then it is time you consider filing for bankruptcy.
- You have been sued– creditors can sometimes file lawsuits against you and even go on to win. A lawsuit against you is just the start of a more aggressive campaign to get all your assets. Many times, creditors who have won judgments against you can also size your bank accounts through levies and also garnish your wages.
- You are unemployed– you have no job meaning that you have no source of income. Everything you purchase, you cannot afford, and the creditors have come knocking. Such a situation should call for immediate filing for bankruptcy.
- You are facing foreclosure– if your mortgage lender is threatening to foreclose on your house, then it is time that you file for bankruptcy. This is because, filing for bankruptcy will allow you to keep your home, and comfortably catch up on payments.
- You cannot handle your minimum payments– if your monthly minimum payments on credit cards and loans have become too much to keep up with, then you may want to file for bankruptcy because. Being unable to pay monthly minimums is a complicated financial issue that should not be taken lightly.
- You are stressed, and it shows– often people who are in debt and struggling to make ends meet do not sleep. They are anxious about financial situations and may even fall into depression. Never having enough money for critical stuff creates continuous stress that will negatively impact your health.