Declaring bankruptcy isn’t an easy decision, and I’m saying this from personal experience. When I filed, I had near-perfect credit. It wasn’t that I was a deadbeat who didn’t pay my bills. Instead, an acrimonious divorce left me unemployed and supporting two kids using credit cards. Life happens, and that’s why approximately 800,000 Americans file bankruptcy each year.
How do you know when you should throw in the towel? Personally, I knew when the writing was on the wall and I wasn’t going to be able to change the outcome. Rather than focusing on my failure, I focused on a new beginning. The bankruptcy took the pressure off and gave me a chance to breathe while I found a job and built a life I love.
Bankruptcy can also be a new beginning for you. Imagine how great it would feel to have that financial pressure off of you and how much time and energy it would free up for new endeavors.Yes, there are consequences to filing, but if you are experiencing any of the following signs it might be worth it.
6 Signs It’s Time to Declare Bankruptcy
If any of these signs sound familiar, it might be time for you to contact a bankruptcy attorney who can help you get that second chance you need.
1. You Can’t Answer Your Phone
True story: One of the reasons I knew it was time to file is the fact that I had set a special ringtone for creditors so I’d know not to answer the phone. If nine out of every ten calls you receive is a collector, it might be time to hang up on them for good.
2. You Dread Checking the Mail
For some people, getting the mail is something they look forward to because their Amazon packages may be there. For those who are suffering from financial issues, getting the mail may be an activity that fills you with dread. If you don’t want to check your mail because you are afraid to see how many bills and overdue notices will be in it, it’s time to consider bankruptcy.
3. You Are Making the Minimum Payment on Your Cards
Making the minimum payments on your cards is a trap. Paying the minimum will barely touch the principle, if it touches it at all. You’ll rack up interest fees over time and you’ll never be able to end the cycle. Some cards even double your balance if you don’t pay by a certain date. Filing bankruptcy is a good option if you’re caught in the credit card trap.
4. You Are Using Credit Cards to Pay Your Bills
You can’t keep using your credit cards to pay your bills for too long or you’ll end up in a huge financial mess. If you’re doing this, you’re most likely going to end up filing bankruptcy at some point anyway. Might as well file and get back on track now, before your debt becomes even deeper.
5. You Are Relying on Payday Advances
Payday advances are another pit it’s easy to sink into when you’re having financial problems. These loans are expensive, and if you are late on a payment it will become a lot more so. If you can’t cover your basics without getting stuck in the payday advance cycle, it might be time to file.
6. You Are Considering Consolidating Your Debts
Consolidation loans are tempting, and if you don’t mind paying more in the long run in exchange for having a manageable payment now it might be a good option. However, you should avoid consolidating your debt unless you’re sure you can handle the new payment. The new payment will be lower, but you’ll pay for longer, costing you more in the end.
In short, it’s time to file bankruptcy if your debts are beyond your current means, you have burned through your savings, and you have no new financial prospects on the horizon. If you still have savings, consider filing for bankruptcy before you spend that money. Filing could save the last bit of money you have and allow you to put it toward your long term financial stability.
