7 Signs to Indicate You Might Be Going Bankrupt

8 min read

Is debt overwhelming you? Do you feel like it is the end of the road for you? Relax; you have options. Having a huge debt and little or no income can make you feel like someone put the entire weight of the world on your shoulders. The stress associated with being unable to pay your debts, let alone the sleepless nights spent worrying about what tomorrow will bring, could be quite debilitating.

If you are reeling under the weight of debt, filing for bankruptcy can be a lifesaver. This does not mean you are a failure. In life, we make decisions that sometimes get us in a real tight bind.

The beautiful thing about falling is that you can always get up. Filing for bankruptcy could be just the upward lift you need to get your finances back on track. If you are sinking deeper into debt, the following signs could indicate that bankruptcy is your most viable option.

1. High Debt, No Income

If your expenditures are more than your income, you are quickly headed into serious debt territory. Any lost income must be quickly replaced and appropriate budget cuts instantly implemented. If you already have a huge debt and your main source of income has dried up, you will soon need to file for bankruptcy.

2. High Credit Card Balances versus Decreasing Income

The first warning sign that you need to file for bankruptcy is if you cannot keep up with your credit card balances. Besides slicing the cards, the month-on-month interest rates may get to the place where filing for bankruptcy is the only option.

3. You Are Making Less Than Minimum Payments on Your Debt Accounts

If you find yourself unable to make even the minimum payments on your debt accounts, you are going to have to file for bankruptcy quickly.

4. You Are Juggling Payments

If you find yourself applying for a new credit card to get cash advances to settle an existing credit card, you should stop. Once you start, this cycle never ends unless you file for bankruptcy.

5. You Have Multiple Credit Cards

Piling up on credit cards means you are piling up debt as well. Unless it is necessary, stick to one credit card. However, if you already have multiple credit cards that have clocked their limits, you might want to consider filing for bankruptcy.

6. You Use Your Credit Cards for Cash Advances

If you find yourself using credit cards for cash advances as opposed to using them for convenience, you are already in need of financial help. The more you use your credit cards for cash rather than for their convenience, the more into debt you are sinking. Bankruptcy helps you stem the tide and embark on a financial recovery journey.

7. Loss of a Job or an Insolvent Business

If your main source of income suddenly dries up and you are at an age where getting another job is almost impossible, do not think twice about filing for bankruptcy if you have a huge loan. You should also consider filing for bankruptcy if your business becomes insolvent.

In most cases, filing for bankruptcy is the last option. Rather than just sit back and hope that your debt will disappear, you are better off filing for bankruptcy and putting in motion a debt recovery program that will not cripple you.

If you experience the above warning signs that indicate you are in serious debt trouble, a financial counsellor could come in handy. Admitting that your debt has become unmanageable is a first step to solving it. Act quickly rather than wait and hope that the situation will get better by itself. It is easier to get out of debt when you are going down than waiting to hit the rock bottom first. However, even when you cannot sink any further, a bankruptcy arrangement could be the rope you need to get back on top.

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