When is it Time to File for Bankruptcy?

If you’re facing financial difficulties, it may be hard to determine when enough is enough. Many people are unsure when to file for bankruptcy and delay it. However, each month that goes by with unpaid bills makes circumstances worse. It’s best to file for bankruptcy before your situation is so dire that you can’t see a way out. Here are the signs it’s time to consider filing for bankruptcy.

You Spend More Than You Earn

Spending more than you earn may seem like an easy way to afford luxuries, but it can snowball and affect your financial future. It’s simple math: if you spend more money than you take in, you will eventually be unable to pay for necessities and bills. Consistently living outside your means is an early sign that you may need to file for bankruptcy.

You Depend on Credit Cards to Pay for Necessities

You’ll quickly rack up debt if you consistently place your monthly bills and necessities on credit cards that collect monthly interest. Only paying minimum payments increases debt and adds financial stress to your family and relationships. Using one credit card to pay the balance of another credit card is another sign you may need financial help.

You Intentionally Don’t Pay Bills Or Put Off Personal Maintenance 

When facing financial difficulties, prioritizing payments for the most important bills is the top priority. This could mean you regularly put off haircuts, dentist appointments, and fixing your car to use funds elsewhere. However, avoiding these things can lead to huge bills in the future, such as prematurely needing new tires on your car or a root canal. Not having enough money to pay basic bills and necessities like groceries and utilities can also lead to financial hardship.

You Use Credit Cards to Pay for Emergencies

If you cannot pay for emergencies or unexpected payments without using a credit card, you probably don’t have an emergency fund. This means one serious accident or injury could derail your entire financial stability and force you into filing for bankruptcy.

You’re Behind on Your Mortgage and Facing Foreclosure 

Every mortgage lender has different stipulations regarding when they can legally foreclose on your home. A home can enter the foreclosure process if you miss three to four mortgage payments. If you’re behind on your mortgage, talk to your lender about making payments more manageable. If you cannot reach an agreement with the lender and still cannot make payments, you’ll want to decide when to file for bankruptcy. While many people avoid filing for bankruptcy due to the fear of losing their house, allowing months to go by without paying your mortgage can also lead to losing your home. In addition, you can often keep your family home if you file Chapter 7 bankruptcy.

Creditors are Suing You for Payment

If you don’t pay your bills, they will get sent to collections. Once a payment is in collections, you’ll get calls from creditors pressuring you to make payments. If a creditor cannot get payment even after attempts in collections, they may file a lawsuit against you to compel you to pay. When you file for bankruptcy, a “stay” is placed on creditors so they cannot contact you or request payment once bankruptcy has been filed.

Determining When to File for Bankruptcy? Let Badgley Law Group Help

Deciding when to file for bankruptcy is challenging. However, you’re not in it alone. Contact an Orlando bankruptcy attorney like Jeffrey Badgley to help you navigate the bankruptcy process. Bankruptcy may be the right decision if you’ve exhausted all other options and cannot become financially stable. Call our office at 407-781-0420 to discuss your case.

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