Economic times are tough and many people may find themselves on the shorter end of the stick when it comes to finances. This can be due to loan debts, overwhelming bills, low wages, business and personal expenses, and much more. Unfortunately, some individuals may not realize that they’re heading towards bankruptcy before it’s too late. Being aware of the warning signs and getting expert advice early on can help in avoiding the worst case scenario.
What Are the Warning Signs?
People that file for bankruptcy often make the mistake of waiting too long before seeking advice from a bankruptcy attorney. Here are some warning signs you should be aware of:
1. You don’t have savings.
Living paycheck to paycheck can be tough because you’re spending your money as quickly as you receive it. If you don’t have any savings set aside for emergencies, an unexpected event or disaster can set you back and easily cause you to fall behind on paying important bills.
2. Your debt-to-income ratio is high.
A debt-to-income ratio is the percentage of monthly income that goes towards paying your debts. For example, if you make $2000 per month and $1000 is going towards paying off bills, then that means your ratio is 50%. A significantly high ratio will affect your ability to apply for loans.
3. You’re struggling with debt collectors.
Receiving demands and notices from debt collectors is another red flag. This occurs when a debt goes unpaid for longer than 180 days and the creditor sells the debt to a debt collection agency.
4. You have high interest rates due to being late on credit card payments.
Being unable to pay more than the minimum payment will incur additional interest on the remaining balance. If you find yourself unable to catch up and pay off your balances for an extended period of time, it’s likely you will be stuck in that cycle of debt.
5. You’re struggling to pay off substantial medical bills and expenses.
Having inadequate health insurance or none at all can lead to expensive medical bills in the case of unexpected injuries, medical conditions, or hospitalization. A significant rise in debt due to medical bills can force you to file for bankruptcy.
6. Your personal relationships are being affected by your debt.
Having large amounts of debt is a huge financial burden on your life. This leads to feelings of stress and can cause arguments with loved ones – further straining your personal relationships. People often tend to hide their debt and keep their loved ones in the dark, which can also be a strong sign of a debt problem.
Get the Help You Deserve
If multiple warning signs apply to you, you may be on the verge of bankruptcy. We highly recommend that you seek out legal advice from a qualified bankruptcy attorney before it’s too late. Rely on Family Law Richard E. Young & Associates and schedule an in-depth consultation today! For more information, please visit our website or call (949) 951-9529.