No one ever has a goal of going bankrupt. Many people will do anything they can to delay the process, although in the end, it may be inevitable. On the other hand, sometimes people may file for bankruptcy when there are other options, such as debt consolidation, that could help. So, how do you know when it’s time for you to file for bankruptcy? Below are five very common signs that you’re in over your head and that bankruptcy is a good option for you.
1. You Cannot Pay for Groceries
Groceries are one of the basic essential needs everyone has. One of the first clear cut signs that you are in financial trouble is when you do not have enough money to put food on your table. Paying for groceries also doesn’t mean putting that expense on a credit card if you cannot pay that credit card off at the end of the month. In fact, putting anything on a credit card that you cannot pay off the full balance at the end of the month indicates that you’re living beyond your means. However, because groceries are such a basic need, when you’re putting these on credit, it shows that there’s a real problem.
2. You Pay Off Credit Cards with Other Credit Cards
There are times when it’s okay to use one debt to pay off another debt. For example, you may get a balance transfer on a credit card for zero percent interest. You can then transfer high-interest debt to that card and essentially save lots of money in interest, while also fully paying off one of your debts. There are times, though, that paying off credit cards with another credit card, or other debt, could indicate that you are in financial trouble.
If you are using balance transfers simply to free up more money to spend, it might be time to file for bankruptcy because you are living beyond your means. When this is the case, it becomes a vicious cycle. You take out one debt to pay off another but are still left with the new debt you have to pay off. You likely can’t repay that debt either, since you couldn’t pay off the original debt. Often the only way to end this cycle is by filing for bankruptcy.
3. Creditors Are Garnishing Your Wages
Wage garnishment is a clear indicator that you may want to file for bankruptcy. It’s extremely difficult to get back on track when you’re not even receiving your full paycheck. When you file for bankruptcy, however, that wage garnishment stops, so you are better able to set your financial situation right and move forward with your life.
There are some important considerations when filing for bankruptcy to stop wage garnishment. For example, bankruptcy will not wipe out all of your debts. If you owe the government back taxes, or owe alimony or child support, these debts will not be discharged through bankruptcy. That means if the debt your wage garnishment is repaying falls under any of these categories, your wages will still be garnished after bankruptcy and you may be in a worse position.
Although you should always speak to an attorney before filing for bankruptcy, it’s particularly important to do so when you’re trying to stop a wage garnishment. An attorney will be able to determine if the wage garnishment will stop after bankruptcy.
4. You Fear Foreclosure on Your Home
It’s true that you cannot discharge a home loan through bankruptcy and still keep your home. However, a Chapter 13 bankruptcy will provide you with some time to repay monthly payments you have missed. When filing for Chapter 13 bankruptcy, your debt isn’t discharged but, rather, it is restructured into a repayment plan. With this plan, you will typically have three to five years to pay back your debt. For many, that is plenty of time to bring themselves up to date with their mortgage, which can save them from foreclosure. If your lender has already started foreclosure proceedings, or you fear they’re about to, it may be time to file for bankruptcy.
5. You Can’t Sleep at Night
A surefire sign that you need to file for bankruptcy is when your debt is keeping you up at night. It’s natural for people who are drowning in debt to be so worried about it that they can’t stop thinking about it, even when they’re supposed to be sleeping. If you have a significant amount of debt, you likely know this feeling. You’re likely worried about the next day when you will face numerous phone calls from debt collectors, or even fear them showing up at your home.
If your debt is keeping you up at night, it’s typically because you don’t know how you’re going to repay it. When this is the case, filing for bankruptcy could be a good option. A Chapter 7 bankruptcy will discharge most of your debt completely, meaning you don’t have to repay it. A Chapter 13 bankruptcy won’t discharge your debt but will allow you to pay it back over a greater period of time.
Contact A Florida Bankruptcy Lawyer
If a creditor has filed a lawsuit against you to start legal proceedings to recover the debt, you may need to see an attorney who can provide a solid defense. Fort Lauderdale bankruptcy attorneys understand how difficult it is when someone falls into financial hardship. If an attorney has suggested bankruptcy as an option, it’s a clear sign that bankruptcy could be the right option for you. An attorney will also be able to recommend whether a Chapter 7 or Chapter 13 bankruptcy is your best option.
If you’re struggling with debt, our attorneys at Loan Lawyers can help you determine if bankruptcy is the right option for you. If you have noticed any of the above signs that it’s time to file for bankruptcy, call us at (954) 523-HELP (4357). We know there are options available, and we’ll advise on which ones are right for you. Call us today or contact us online to schedule your free consultation.
Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations.