Filing for bankruptcy is probably one of the biggest financial decisions you will ever make. While it can help alleviate some of your debts and stop creditors from harassing you, not everyone in a financial situation has to file for bankruptcy.
Therefore, before filing for bankruptcy, you need to consider some crucial factors. Below are some warning signs that now may be time to file for bankruptcy.
You’re struggling to pay the minimum on your debts
If you’re struggling to pay the monthly minimums of your credit cards and other bills, you’re definitely in a serious financial situation. Credit cards have a high-interest rate, which means that making minimum payments can lead to the balance ballooning up quickly.
You’re facing a foreclosure
If you’re behind on your monthly mortgage payments, it may be challenging to get caught up, especially if you have other loans. Fortunately, if you’re in such a situation, filing for bankruptcy may help you stop the foreclosure or buy you some more time to save your home. What’s more, by just filing for bankruptcy, the automatic stay will temporarily stop the foreclosure process.
Debt collectors are constantly calling you
If creditors are calling you to collect debts, this means that your debts are out of control. Although their constant calls can quickly encroach on your peace of mind, ignoring the creditor calls won’t help. Instead, you’ll need to take steps that can help alleviate this problem.
Filing for bankruptcy can help stop your creditors from harassing you. Once you declare bankruptcy, the automatic stay makes it illegal for creditors to call or contact you regarding your debt.
If you recognize any of the above signs, then filing for bankruptcy may help you get back on your feet. First, however, seek legal guidance to help you determine the right chapter bankruptcy for your situation.