Anyone can go through financial hardship. When this happens, one of the questions you will need to ask is how you get out of the financial mess you are in.
Bankruptcy is a legal process through which you can seek relief from some of your financial obligations when you are overwhelmed with debt. But, when exactly is the right time to declare bankruptcy?
Here are three indicators that you need to file for bankruptcy.
Your budget is no longer working
If you are constantly reaching out for credit or relying on a credit card to settle recurrent bills and other obligations, then you are walking on a financial tight rope. Of course, you can create a budget and try to stick to it. But if you are still struggling to meet your financial deadlines even with a budget in place, then you seriously need to consider bankruptcy.
Debt collectors are coming for you
Another warning sign that you need to declare bankruptcy has to do with unending calls and threatening emails from the debt collectors. These usually happen when your debts are overdue. You might also receive notifications that your past-due accounts have found their way onto your credit report.
You are struggling to rise from a major financial pitfall
Generally, most people do not have an emergency cash reserve that they can reach for during an emergency like a hospitalization. As such, a significant shock like job loss, divorce, or unreimbursed medical bills can push them into serious financial hardship. You may need to declare bankruptcy to get out of such setbacks.
Bankruptcy can be a welcome relief when you are overwhelmed by debt. Find out how bankruptcy can help you get back on your feet when you are going through financial difficulty.