Filing bankruptcy might be something you thought you would never need, but in some situations, bankruptcy could be the only way out. It is hard to know if bankruptcy is the right option for your situation, but here are three signs that indicate you should consider if it could help you.
1. You Can No Longer Make Minimum Payments
One of the first warning signs you might see in your life is a problem with making minimum payments. Many people can keep afloat for months or even years when they have debt, but a lot of people will eventually reach the point where they cannot even make their minimum payments.
Even if you can make the minimum payments on your debts, you are probably paying a lot of money in interest on the debts. When you reach the point when you cannot even make these payments, you have a problem.
You may feel tempted to raid your retirement funds in order to pay off some of your debts. But if you're at retirement age, you should consider bankruptcy before you take money from your future self.
Creditors are not typically easygoing and understanding when borrowers start missing their payments. Therefore, if you're missing payments because you do not have enough cash to pay even the minimum payments, you probably need financial help.
2. Your Creditors Keep Calling and Sending Letters
A second warning sign to look for is harassment from your creditors. Creditors do not care a lot about the reasons you cannot pay your bills; they simply want their money. Credit card companies and other creditors will do all they can to collect the money people owe, and this collection process includes calling borrowers and sending letters and emails.
If most of the calls you receive on your phone are from creditors, you probably dread each time your phone rings. In this situation, you may feel helpless to stop them from calling.
Did you know that when you file for bankruptcy, the court issues an automatic stay, which is an order preventing creditors from contacting you? An automatic stay is one of the ways bankruptcy provides relief to people struggling with debts. Once you file, your creditors cannot contact you in any way at all.
If you currently avoid answering your phone because your creditors keep calling, bankruptcy will provide more relief than you can imagine.
3. You Are Facing Foreclosure or Repossession
One other indication that you may need to use bankruptcy is if you are facing a foreclosure of your home or repossession of your car. The only way to stop these events from happening, without using bankruptcy, is to pay the past-due balances in full, and chances are that you cannot pay the balance at this point in your life.
With bankruptcy, you can stop both of these events from going through. You may need to use Chapter 13 bankruptcy to stop foreclosure or repossession, but your lawyer could potentially help you keep your house and car through Chapter 7 too.
The best thing you can do is talk to a bankruptcy lawyer if you face these warning signs in your life. A bankruptcy lawyer will evaluate your entire financial situation to see if there is a better way out for you. If not, using bankruptcy could help you regain control of your income, bills and finances.
A lot of people use bankruptcy for help when they have no other options. If you see these warning signs and feel helpless with your financial situation, now is a good time to call William S. Orange III, Attorney At Law. You can call us or schedule an appointment to learn more about bankruptcy and how it could help you.