How long have you been treading water in the name of avoiding bankruptcy? And, is it even worth it? True, many sources would have you believe that bankruptcy is a bad word. That’s understandable. After all, no one likes to admit that they’re struggling financially, and bankruptcy may seem like an easy way out to some and a complete cop-out to others. No wonder bankruptcy is so taboo. So, is it ever good to file for bankruptcy? And, if so, under what circumstances is filing for bankruptcy the RIGHT decision? Here are five signs it is time to file for bankruptcy:
You find that you are unable to keep up with even your minimum credit card payments
You may be only skipping a month here and there, but those late payments are reported to the credit bureaus. Also, keep in mind that this type of payment plan comes with a repayment term of forever.
When you sit down to make a budget, you find that your current expenses outweigh your income
If this is the case, you will never get ahead, but will rather have to continue to borrow money just to survive, which is a recipe for disaster.
You are borrowing money to pay your bills
This is a vicious cycle that only results to you getting even more in debt. The longer you continue to do this, the worse your financial situation.
Collection agencies are calling you
When your phone begins ringing in attempts to collect money from you that you can’t afford, you know your situation is spiraling out of control. In addition to the money you owe, you are now accruing late fees and collection fees and, if you couldn’t pay on your debt before, there is no way you will be able to pay an even greater debt.
Your financial situation is so far out of your control that you no longer keep track of your debts
You can’t pay them, right? So why even bother to think about it? This type of thinking means that you’re fed up, and also that you need help. In cases like this, bankruptcy may actually be the only responsible option you have.
Bankruptcy should not be taken lightly, as it effects your credit for ten years. At the same time, bankruptcy should not be disregarded as an option if you really need it. If you are only compounding your financial troubles by avoiding bankruptcy, then you must remember that those troubles will also stick to your credit report, just as a bankruptcy will, but that they will continue to get worse while a bankruptcy could serve as a means to an end of your financial woes. If this is the case, it’s time to seriously consider bankruptcy as a smart move on your way to economic health.
(About the Author: Holly is a full-time ultrasound technician by day and a writer and blogger by night. She enjoys writing about personal finance, credit repair, bankruptcy, and more. She stresses the importance of taking control of your financial future.)
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