If you have ever gone through financial hardships, then you know how challenging it is to deal with debt collection calls and wondering just how bad the situation may get. Many people find that filing for bankruptcy gives them a fresh start to build upon. But too often, people are afraid to file because of their own self-judgements and then end up waiting too long, where they experience more stress than if they had taken action sooner. If you are not sure what the early warning signs of bankruptcy would be, then continue reading for more insight.
You are constantly missing minimum payments.
If you are unable to meet the minimum payments for credit cards and other debts, then it is a sign that you may be getting into the negative financially on a too frequent basis. Having trouble paying for items like your home or vehicle can be early signs that bankruptcy could be useful for you. As a bankruptcy lawyer residents trust from Therman Law Offices, LTD would agree with, there is no shame in admitting that you need help.
You are not eligible for debt management.
There are many credit counseling entities and non-profit agencies that offer debt management. What these companies do is negotiate with your creditors for a reduced interest rate and arrange a payment plan so that you can pay off debts quicker. But if you do not have enough income to cover lower payments, then you may want to consider what bankruptcy can offer.
You do not have home equity options.
If you owe more than what your home is worth, then you have negative home equity. You may not be qualified for home equity loans that are used to reduce debts. It is important to consider what taking out a home equity loan would do, as many people end up getting themselves back into debt, causing more financial problems that they had originally started with.
You receive persistent debt collection calls.
Another sign that bankruptcy could be helpful is if you are getting persistent debt collection calls or receiving notices in the mail about a creditor who plans to take legal action against you. Legal action may result in wage or account garnishment. Debt collectors are not empathetic and only seek to get the payment they want, so they can be ruthless and aggressive in pursuing money from the debtor.
Your credit cards are used for necessities.
It’s wise to use rewards cards to pay for your groceries or gas and then pay the bill every month to reap the benefits. But one of the early signs that a person may eventually need to file for bankruptcy is using credit cards to pay for necessities but not being able to pay that bill entirely each month. If you don’t see yourself getting an earning increase in the foreseeable future, then filing for bankruptcy may be the ultimate decision.