Posted by Fred Lake

Signs It is Time to File for a Bankruptcy

Signs It is Time to File for a Bankruptcy

Filing for bankruptcy is a critical decision that needs careful thoughts. Yes, it comes with some pros in that it can deter your creditors and alleviate your debt; the blow on your credit also remains for a while, at times, up to a decade. Yet, if you decide not to file for bankruptcy, it could land you in a severe financial pit.

As a result, we have discussed some signs in here which indicates it is time to file for a bankruptcy 

Debt Collectors are Suing You

There are times you could decide that you will start ignoring calls, emails, and letters from debt collectors. If this is the case and you refuse to pay your debt, the debt collection agency could come in. Should the debt go un-serviced, they might enlist the service of a lawsuit to try to force you to pay up. This is a worse case because fighting a lawsuit is hard, and should you lose; you will probably end up owing more.

With a bankruptcy petition, however, you get some legal protection against debt collectors. On filing the petition, you get an automatic stay against your creditors issued by the bankruptcy court. The implication of this is that you will be spared from any debt collection action, including a lawsuit until the bankruptcy case is discharged.

Part of Your Wages is Being Withheld

Should a debt collector sue you, there are some legal steps they might take to get their money from you. They could freeze your bank account or remove from your wages, depending on the state in which you are residing. Should your creditor get a court order to garnish your wages, there is a percentage of your wages that your employer must hold from your check every payday.

Filing bankruptcy can, however, protect you from wage garnishment. This provides some form of relief, especially if a significant amount of your wage is being withheld.

You Can’t Pay Your Bills

Some conditions could cause financial disaster if unprepared for. For instance, a job loss or an unexpected illness can trigger financial struggles. If you cannot take care of your day to day bill without turning to credit card, it might lead to debts.

When your debt piles up due to poor spending habits, that is not enough reason to file for bankruptcy. Should there be circumstances out of your hands, however, that made your finances take a severe hit, you should consider filing for bankruptcy  

You are behind on Payments like Rent and Mortgage

You can no longer afford to pay all your bills. As a result, you are behind on making payments for your rent, car, or mortgage. Your lender might not be so lenient with you, even if you have been with them for a while. Whatever reason you have for not paying on time is not the business of your lender.

As a result, you should consider filing for bankruptcy because there is no assistance you will get from your lender.

You are almost losing Your Home 

The number of foreclosures in the housing market over the years has reduced. There are, however, many homeowners that are finding it challenging to make their payment. If your financial situation has reached a point where you risk foreclosure, bankruptcy might be a lifesaver as it could help you keep your home and possibly catch up on your payment.

You are considering a Consolidation Loan 

It might be appealing to reach out to a debt management company or go for a debt consolidation loan since it seems like a good idea.

In reality, however, this might not be the case. There are debt management companies that take a huge payment as a fee, and your creditors get back a little amount. This means it will take a while to pay off your debt.

You are Losing Sleep 

The money problem might be the reason you keep tossing here and there at night. Anxiety about every penny you spend could even take away your peace of mind.

Thinking about how disappointed your kids will be when they hear that there will be no birthday parties for all of them could also leave you anxious. Filing for bankruptcy might be your best bet.

Fred Lake
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