Times of financial hardship are normal for just about every American at some point or another. However, it can sometimes be difficult to decipher the difference between a manageable situation and one that will require bankruptcy. Unfortunately, fat too many people suffer the burden of an untenable financial situation for way too long.
For many Americans, bankruptcy offers them a chance of starting over and eventually rehabilitating their finances. A well-known Everett bankruptcy lawyer suggests that you begin the process of at least considering bankruptcy as soon as the early signs of bankruptcy appear. Learn more about early warning signs of a potential bankruptcy below.
- Consistently Missed Payments
- Disqualified From Debt Management Programs
- Negative Home Equity
- Unceasing Calls From Debt Collectors
- High-Interest Rate Loans
While it’s not great for your credit report, a few missed payments here or there is not necessarily a sign that it’s time to file for bankruptcy. However, a pattern of missed payments on important bills such as rent, mortgage, car, etc. could be a sign that your financial situation is one that needs help in the form of bankruptcy. Furthermore, missed minimal credit card payments, cell phone bills, etc. are at the very minimum a sign that it’s time to reconsider your current financial trajectory.
When many Americans find themself in within the grasp of crushing debt, they make the decision to enroll in a debt management program. There are numerous financial counseling agencies as well as non-profit organizations that offer debt management programs and tools.
The function of these companies is to negotiate on your behalf for lowered payments, decreased interest rates, and more manageable payment plans. However, if you do not have enough income to make minimal payments, the route of bankruptcy may be a more feasible option.
If you have negative home equity, it means that you owe more money on your home than what it is currently worth. Those with negative home equity are typically not approved from home equity loans that some use to lower the amount of debt they are in. Additionally, some have taken out home equity loans and still not have enough to pay their debts. Those in either situation are advised to speak with a reputable bankruptcy attorney.
Though it may not seem like it, there are certain laws that limit the degree that a creditor can harass you for debt repayment. However, those laws will not stop all of the calls, notices in the mail, etc. If you have received letters from creditors that threaten legal action, it is in your best interest to begin the bankruptcy process as soon as possible. If your creditor decides to take legal action, it could lead to wage and/or bank account garnishment.
If you are currently taking out high-interest rate loans to pay bills, take care of urgent situations, buy groceries, etc. It may be a sign that it’s time to consider bankruptcy. Common high-interest loans include title loans and payday loans, which typically have interest rates that are above 200 percent. These types of loans can make your financial situation even worse. Many that accept them end up in a never-ending debt repayment cycle. If your financial life is exhibiting any of the aforementioned characteristics, it may be in your best interest to look into the benefits of bankruptcy.