Bankruptcy is a big step, and it’s not always easy to know when you should take the plunge. Yet many people wait far too long to file. They scramble, dip into their retirement funds, and throw good money after bad.
Fortunately there are some clear-cut signs that you can use to determine whether bankruptcy is ultimately going to be the right choice for you and your family.
#1) You have no savings.
Most people don’t have much in the way of savings, so if this is the only sign of financial distress that you’re facing you may not need to file. If you’ve been steadily depleting your savings for months because of your financial problems, then you need to take a good look at your total situation.
You should also think about bankruptcy if you can’t find a single bit of wriggle room in your budget to save as much as $50 a month. That is a good sign that you’re overextended.
#2) You’re using loans or credit cards to pay bills or to pay for necessities.
If you’re using credit cards to pay for utilities, groceries, or the other bills of daily living, then you could be in trouble. This is a sign that you’re just not making enough money to pay for all of your expenses.
You’re also, of course, going deeper into debt, and sooner or later you won’t even be able to meet your minimum payments. When that happens, you won’t have that resource available to pay your basic bills anymore. Clearing away many of these bills by filing bankruptcy can offer you the ability to pay for the basics with your income again, instead of with your credit lines.
#3) You’re being hounded by creditors.
If you can’t even open your mail or answer the phone because creditors won’t leave you alone, you’ve got a problem.
Right now many of those creditors are annoyances. You may have given up on your credit report. Yet eventually, if any of the debts are significant enough, you could find yourself facing a lawsuit.
If you’re facing a lawsuit your need to file bankruptcy has just transitioned into an emergency matter. A judgment on your credit report closes down options for housing and may even give the creditor the right to garnish your wages.
#4) You’re behind on your rent or mortgage.
If your financial situation is threatening your housing bankruptcy can help. It can either improve your credit score enough to help you move to somewhere cheaper, or it can help you catch up on back payments while providing you with some protection that allows you to retain your housing.
Of course, there are other ways to prevent foreclosure, and your lawyer can talk to you about them as well, if you wish to explore them.
#5) You’re in danger of losing your transportation.
Whether this means having a car or not depends on where in Newark you live. There’s some neighborhoods where the public transportation and walkable infrastructure are excellent, and there’s parts where you really need a car.
You have to consider how you’ll get to work if you’re facing a repossession.
Even if you could get to work, a repossession can create a lot of problems for the average family. Bankruptcy can stop it.
#6) Your finances are impacting your mental health.
Half of all adults with debt problems also develop mental health problems. In some ways it’s a chicken-and-egg problem, but it’s hard to deny that debt can impact both your mental health and your marriage, if you have one.
If you feel like you just can’t take it anymore, it may be time to talk to a lawyer.
#7) The situation is unlikely to improve.
You know for yourself if your situation is temporary and permanent. Can you get another job, or a better one, or are you at the limits of your training and experience?
Some people can change their situations very quickly. Others need a lot more time and breathing room. Only you can make the honest assessment of your own unique situation.
Get Help Today
Sitting down to talk with a bankruptcy lawyer about your options can help you gain a better understanding of your choices. If you’re in financial distress, reach out to our office to get help today.