A significant portion of the American population lives on the edge of financial peril. Between living paycheck to paycheck and having no savings set aside for unexpected emergencies, many families are one dramatic life event from facing overwhelming debt. Too often, however, people do not recognize the signs and continue to fight even as they are falling further and further behind.
What are some common signs that it is time to consider bankruptcy as your best debt relief option?
- Your credit cards are out of control: If you have maxed out more than one card and find yourself simply paying the minimum monthly payment, you are in danger. Credit card debt must be closely managed and tightly controlled. If the debt is overwhelming you, it is time to consider bankruptcy.
- You sacrifice one bill for another: If you have reached the point where you are intentionally late or sacrificing one bill to ensure you have enough money to pay another, it’s a sign that you are likely facing mounting debt you no longer have control over.
- You pay one credit card bill with another credit card: It is not uncommon for people to transfer debt between credit cards to take advantage of consumer rewards programs, but when you start to use a credit card to make payments on another credit card with no plan for repayment, you could be in trouble.
- You are starting to get phone calls from debt collectors: Your creditors will often act quickly to protect themselves and ensure their debt is being repaid. When you find yourself on the receiving end of relentless collection agency communication, it is time to review your bankruptcy options.
- You consider cashing out retirement funds to pay bills: It is not uncommon for individuals to be tempted by the lump of cash that is sitting in a 401(k) account. However, early withdrawal of these funds generally incurs fees, penalties and additional taxes.
With financial devastation right around the corner, it is wise to act quickly to protect your future stability. While bankruptcy might seem like an unsavory option, the process was created to give hardworking Americans a chance to get out from under overwhelming debt and start on a path toward a more stable future. Do not hesitate to discuss your unique situation with an experienced bankruptcy attorney.