In May of 2021, the United States Courts published an article stating that bankruptcies filed in March 2021 totaled 473,349 compared to 764,282 from the previous year. However, some believe this could be because the courts shut down in-person proceedings. Another factor that may have affected this decline could have been the increased government assistance.
Although fewer people are filing, it doesn’t mean that everyone is doing well financially. In fact, many individuals may be experiencing warning signs and are unaware of them.
What are some warning signs you’re headed for bankruptcy?
The most obvious is that you cannot pay your bills or spend more money than you make.
Below you’ll find different signs that may mean that you’re heading towards bankruptcy. If you’re interested in reading more about these signs and when to talk to a professional, continue reading below.
Consistently Spending More Than You Earn
This is the number one reason that most people have to file for bankruptcy and the first warning sign you need to pay attention to. This can come from different causes, from a medical emergency, job loss, or even a divorce. However, others simply just aren’t unable to properly manage their money.
Missing Payments
If you can’t afford to pay your bills, it’s an indicator you have too much debt. This is especially an issue if you can’t afford essential bills such as your rent, mortgage payment, auto payments, utility payments, or insurance payments. Some people choose to use their credit cards to pay some of these bills, which will cause bigger issues down the road.
Overuse Credit Cards
While they can be helpful, credit cards can also be detrimental due to their high-interest rates. And unless you have no choice, you should not keep a balance on them for more than a month or two if you can at all help it. Once you’ve lowered your expenses or have additional income, the first thing you need to do is pay off your credit cards and then start an emergency fund.
You’ve Spent All of Your Savings
If you’ve gone through your savings accounts to pay outstanding bills or buy groceries, this is a clear indication that you’re in financial trouble. Having a savings account is essential for dealing with emergencies, such as if your vehicle breaks down.
Creditors are harassing You
Do you dread answering your phone and hate when you hear that robot inform you of your outstanding balances? Creditors are stressful to deal with. They will threaten you, call you relentlessly, all in the name of getting their money.
Creditors don’t stop at phone calls. They also send you threatening letters that make you dread going to your mailbox. If this is happening to you and you can’t afford to pay the bills off, you may need to contact a bankruptcy attorney to help you.
You Can’t Qualify for Debt Management
Before considering bankruptcy, many people enroll in credit card counseling or debt management plans. This is when a company or non-profit ground helps prioritize your bills and pay them in a timely and orderly fashion. They also contact creditors on your behalf to put an end to the harassment. To do this, you need to have assets or income to qualify. If you don’t have one, you’re not eligible for enrollment. If this happens, reach out to a qualified bankruptcy attorney.
Personal Bankruptcy Solutions
In order to determine if it’s through mismanagement of finances, sit down with all of your monthly bills, add them up, and then find out how much you make each month. If the expenses are higher than your monthly income you have three options.
● Learn to manage your money better
● Find a way to earn more money.
● Or file for bankruptcy.
If you cannot figure out a way to earn more money, look for areas where you can cut your expenses. In the meantime, you may want to speak with a bankruptcy attorney about your options.
If you are in financial straits and overwhelmed in debt, the bankruptcy attorneys at Hines Law can help. We have been helping the residents of Massachusetts resolve their debt issues for more than 20 years. Personal bankruptcy may be the right solution for you. Call our bankruptcy firm for a Free Consultation and gain control of your financial life and future.