How do I know when it is time to file for bankruptcy?

If creditors are calling your phone nonstop and your mailbox is full of bills, there is no doubt that you probably feel stressed and frustrated by your financial situation. It is not that you do not want to pay your debts. You cannot give them money you do not have. Before you throw in the towel and file for bankruptcy, consider the following information first. 

Many East Orange area residents are unable to pay their bills because of job loss, a decrease in income, financial emergencies and unexpected expenses. According to USA Today, the “main reason for personal bankruptcy filings is medical debt.” It is not necessary for you to wait until your home is in danger of foreclosure to start assessing your situation to determine if it is time for you to file for bankruptcy. The following indicators could mean it is time for you to speak with a bankruptcy attorney for guidance. 

  • taking out payday loans and cash advances
  • considering debt consolidation
  • relying on credit cards to get by
  • can barely afford the minimum payments on bills
  • not able to repay debts within a reasonable period 

Bankruptcy can stop your creditors from contacting you and charging additional penalties on your overdue accounts. It cannot fix everything. It is only effective if you identify the issues that have landed you in this situation so that you can avoid them in the future. Evaluate your spending and financial habits. You might benefit from working with a financial planner or credit counselor to improve your money management skills.

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