It is not always easy to know when a bankruptcy could be the right choice for you, but there are some red flags that may help you recognize that you are in financial trouble. By recognizing when you’re in over your head in debt, you’ll be in a better position to help yourself by exploring options like bankruptcy.
While bankruptcy sometimes gets a bad name for itself, the reality is that it is a helpful financial tool that could help you avoid long-term debt. Whether you’re dealing with heavy medical debt or you want to resolve debt from credit cards that you just can’t seem to get a handle on, bankruptcy could be right for you.
What are the signs that you need to consider bankruptcy?
Here are three signs that you may want to consider bankruptcy.
- You can barely make your minimum payments
One of the first signs is that you aren’t able to make more than a minimum payment and may miss a payment here and there. When you miss payments, there are fees that you’ll have to handle. When you only pay a minimum payment, it’s possible that the interest could be more than you pay and will continue to grow the debt in your account.
- Collections agencies have started to call around the clock
When you can’t make payments for long enough, those debts may be sold to collections agencies. When you start getting letters and phone calls, it’s time to start looking into options to pay off your debts permanently, like bankruptcy.
- You’re facing foreclosure
Finally, if you’re facing foreclosure, that could be a sign that you need to take quick action and look into bankruptcy to save your home. With a bankruptcy, it might be possible to have missed mortgage payments forgiven or tacked onto the end of your loan while addressing other debts and freeing up more of your income to make it easier to pay on time in the future.
These are three signs that you may want to consider bankruptcy. The right kind of bankruptcy could help you resolve your debts and make your financial future more secure.