While living with a certain amount of debt has become something of an expectation for many Americans, if that debt grows out of control an unstable financial future might be right around the corner. With credit cards, medical debt, mortgages, vehicle loans and personal loans, it is not uncommon for individuals to see their debt levels slowly and steadily grow into an overwhelming problem. Fortunately, the Bankruptcy Code exists to give people a way to eliminate debt and make a fresh start toward a more stable financial future.
Facing challenges, many individuals would rather put faith in themselves to solve their problems and get clear of whatever trouble they’re in. Unfortunately, financial matters often take more than creativity and hard work to overcome. Once the trouble starts, it can be like a fast-moving avalanche of bills. Here are some signs that it might be time to seriously consider bankruptcy as a debt relief option:
- You don’t know how much credit card debt you have: It is common to have multiple credit cards mixed in mixed in with a department store charge card or two. Generally, these cards all have different balances and APRs. When you completely lose track of how much you owe across your credit cards, however, it is time to slow down your spending and explore your financial options.
- You are approaching the maximum limit on one credit card or more: If you are considering opening additional lines of credit because you are reaching the spending limit on multiple credit cards, you are heading toward financial peril.
- You overdraw your checking account: While many people are guilty of math or timing errors that lead to an overdrawn account, when this happens more than twice in a year, you should recognize that your financial prowess is not where you need it to be.
- You lack an emergency savings account: Many Americans live paycheck to paycheck. While this can be a stressful existence, when facing unexpected expenditures, it can directly lead to financial peril. It is wise to put away some “just in case” money.
- You pay bills with credit cards, and then don’t pay off the credit card: Many people have certain utilities and other bills tied directly to credit cards. When this is a snap decision, though, and the debt is not paid off, it can be an indicator of trouble.
These are some early warning signs, but you might already be past that. If you start to receive phone calls or letters from debt collection agencies, or you are facing legal action including wage garnishment or vehicle repossession, you should have already filed. Do not hesitate to discuss your unique situation with an experienced bankruptcy attorney.