ARE YOU SHOWING THESE BANKRUPTCY WARNING SIGNS?Bankruptcy Warning Signs
Everyone knows of the negative stigma that bankruptcy carries.
Most people never even comprehend that they would one day have to file
for bankruptcy. While bankruptcy is not in anyway life threatening, it
is still clearly a last ditch effort that you should avoid if
possible. For some, bankruptcy is, in fact, a fresh start; something
necessary for some businesses and individuals to clear their slate.
In October 2005, new bankruptcy laws went into effect in the
United States. These laws make it more difficult for many people to
file Chapter 7, the bankruptcy that wipes out all of one’s unsecured
debt. Since bankruptcy is not necessarily an option for everyone
anymore, you should be alert to any signals that a financial crisis is
on the horizon. If you learn to recognize it, Professional Debt
Advisors can step in before it becomes a tragedy.
A primary signal of financial trouble is when your credit card
bills rise month to month. If your balances are consistently rising,
even while you are making some payments, beware. This is a warning
that you are unable to pay down your debts and could end in
bankruptcy.
Review your last three statements from a credit card. Are the
balances rising? If so, you may need some help. You should also check
to see how much you are paying each month to these creditors. Are
barely able to afford the minimums? Are you paying an amount equal to
25% or more of your cash flow? These are indicators of an impending
financial crisis.
Have you recently used a home equity loan or line of credit to pay
down your debt? Beware. If you rely too heavily on this option you
could be putting your house at risk. These loans are secured by your
home. These loans are terrific if you have cash flow and are just
looking for an easy way to reduce your interest rates. If however, you
are merely moving your debt from one place to another to try to bide
time, you should take it as a warning sign that you need financial help
or assistance. When people “Rob Peter to Pay Paul” it is frequently as
sign that bankruptcy is around the corner.
Another obvious signal is if you cannot afford to carry insurance.
Life, car and medical insurance are items that today’s adult cannot
afford to be without. They are not inexpensive. If your budget is so
tight that you cannot pay your premiums, then you should take this as a
sign of things to come. Insurance premiums should be part of your
budget.
Most warning signs, or at least the most obvious, are related to
your immediate cash flows or financial situation. There are, however,
other factors, that are more or less outside your control. For
example, your employment status and salary could change overnight. If
you do not have insurance, a natural disaster could place untold stress
on your budget. Just look at the results of all the hurricanes in
2005. You also may have cosigned for a family member’s or friend’s
loan or business. If something happens to them or their business, you
are financially liable and this could push your situation over the
edge. You should never assume financial responsibility for another’s
actions unless you can afford to handle a potential cash call.
Lastly, a lawsuit could push you into bankruptcy. Some lawsuits
could be the result of an accident and cannot be avoided. Others are
frivolous. Still others could be from a creditor trying to collect on
unpaid debts. These suits need to be avoided early on with financial
planning or professional assistance. If you fall too far behind and do
not bring in a professional to help, a lawsuit could jeopardize your
home or car, pushing you into an unwanted bankruptcy.
If any of these signs are apparent in your situation, you need to
act now. Professional Debt Advisors has assisted thousands of
consumers in situations such as these. We know how to help you avoid
bankruptcy and can get you back on safer financial ground.
Our Financial Analysts can tailor a plan for you that can reduce
your debt balances drastically. Repay your debts more quickly and
avoid bankruptcy. For a FREE, no obligation consultation simply fill
out the form to the right or, call toll-free, 866-559-DEBT (3328) to
speak with a trained Financial Analyst now. If you are seeing any
bankruptcy warning signals, you really have little time to waste.
* We are not attorneys and this
information should not be construed as legal advice. This website is
for informational purposes only |
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