If you’re struggling financially, you may be forced to take steps now that will make a bankruptcy likely in the future.
While most experts agree that the economy is recovering at a decent clip since the recession of 2009, the road to recovery has been a long and hard one for many individuals and families. You may have been forced to take on debts you didn’t want to incur or miss payments on important mortgage, car, or small business loans just to find the cash to cover your daily needs. The good news is that filing for Chapter 7 or Chapter 13 bankruptcy can help. Here are 6 signs you may need to begin investigating the bankruptcy process now for likely future use.
You’re Already Missing Payments
Once you get behind on your bills, it can be very difficult to recover. This is especially true of high-interest accounts like credit cards. If your monthly payments already exceed your available monthly income, this is a bad sign of a potential downward spiral that can only be arrested by a sudden influx of cash or a bankruptcy proceeding.
Your Credit Cards are Maxed Out
Credit cards are a convenient way to help pay for necessities, but if you don’t make your payments each month credit card debt can quickly grow out of control. If all your credit cards have been maxed out, you may want to consider discharging the debt through bankruptcy rather than dealing with the high interest and fees.
You’ve Exhausted Your Home Equity
If you own a home, you may have taken out a home equity loan and used this lower-interest cash to pay off higher-interest bills. This can be a good strategy, but only if you’re certain you will be able to clear up your other debt problems with the home equity money. Otherwise, you will just be digging yourself deeper in debt.
You’re Using Payday Loans
Payday loans are best used sparingly because of the extremely high interest rates. While you might get away with taking out one payday loan to cover an emergency, if it becomes a habit you can face a real problem. If you have been rolling over multiple payday loans you may find bankruptcy is the only way to escape your debt.
You Have Accounts in Collections
If you don’t pay your bills, eventually the lender will sell them to a collections agency. This is a bad sign because it shows that the lender has lost all confidence in you and doesn’t believe you’re ever going to pay off the loan. If you have debt collectors calling you, you should consider filing for bankruptcy to protect yourself.
You Have No Income
Probably the most sure sign of a bankruptcy in your future is if you have high debt but no income or extremely low income. Do the math if it is going to take you a decade to pay off the debt at your current income level you might as well file for bankruptcy and take the 7-year hit to your credit instead.
Contact California Bankruptcy Relief Today
To learn more about your options for discharging your debts through bankruptcy and getting a fresh start for your financial life, please contact California Bankruptcy Relief today.
