If you have been under severe debt for a long time and your income is not enough to make even the minimum monthly payments, it may be time for you to consider bankruptcy. There are both pros and cons to bankruptcy. For starters, it will ruin your credit report for up to 10 years, and you may experience some issues taking out more loans in the future.
At the very least, you will be able to get rid of some of your debt. If you want to discharge your loans and Press The Restart Button, consult an attorney today to understand your options. Meanwhile, there are a few telltale signs that you need to file for bankruptcy.
Signs it may be time to consider bankruptcy.
You are already missing payments.
One of the biggest signs you may need to file for bankruptcy is missed payments. If you are unable to keep up with your current bills, such as a mortgage, medical bills, credit card payments, and student loans, you may be in a bigger problem than you realize. It is a warning sign if you cannot even make the minimum monthly payments.
You spend more than you earn on a regular basis.
If you find that you are incurring more debt every month than you can afford, it is a clear sign that you need to handle your expenses better. Analyze your spending habits thoroughly and see where you can reduce your expenses. If you are unable to lower your expenses and your debt keeps growing, you will be in a difficult situation soon.
You have spent your savings.
You should put a part of your monthly income in your savings account. If you find yourself emptying your savings account to pay for your debt and even the basic necessities, you will soon empty your account. Your savings should go towards emergencies, putting your children through college, or for your future.
If you spend your savings on household expenses, you should consider speaking to a bankruptcy attorney.
You are getting demanding phone calls from debt collectors.
Another huge red flag is when you start getting demanding phone calls from debt collectors. If they sound annoyed or irritated on their phone calls or texts, it should be enough to get you to start thinking about filing for bankruptcy. Such phone calls usually start when your debt has been due for 30 to 90 days.
You are using your credit cards more.
If you are using your credit cards for even the most basic necessities, such as gas and groceries, you are in trouble. You should be able to pay for such things with cash.