When you think of the word “bankruptcy,” what do you imagine? Do you think about people who are struggling and who then lose everything? Do you imagine a future where you don’t have bills and can actually relax? Bankruptcy means different things to people based on their experiences, but you should know that bankruptcy is, if used correctly, largely something positive. It can help you get out of debt and stop creditor harassment. It can sometimes prevent foreclosures or vehicle repossessions, too.
Unlike the common idea of bankruptcy that most people have, a bankruptcy doesn’t usually leave you with nothing. There are exemptions and supports to help you keep many of your assets, so you’re not starting from scratch.
With all that being said, do you know when it’s an appropriate time to file for bankruptcy? Here are three major red flags that it’s time to discuss your legal options.
- You can’t pay your necessities
Perhaps the biggest red flag of all is that you can’t pay your necessities. If you’ve fallen behind on rent or your mortgage payment, can’t afford food and are making the choice between getting medications or buying dinner, then you’re in a position where a bankruptcy, as well as other supports, may be helpful to you.
- You’re relying heavily on credit cards you can’t pay off monthly
Another major red flag is that you’re relying on a credit card that you can’t pay off each month. If you’re putting your groceries on credit or paying your rent with a credit card, then it’s time to reassess your financial situation.
- You receive notices about lawsuits from creditors
A final major red flag is if you’re starting to receive letters about lawsuits from creditors. If you haven’t been able to pay back collectors, they may take you to court. To stop this, a bankruptcy may be a good choice.
A bankruptcy can put an end to creditors calling or sending you mail. Lawsuits will be put on hold, and you’ll get a chance to get your financial footing back. Don’t be afraid to look into a personal bankruptcy. It could be the right one for you.