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6 Signs You May Want to Consider Bankruptcy

If you are currently dealing with one or more of the following situations, it may be time to consider bankruptcy, to free yourself of some or all of your debt. These 6 signs are red flags when it comes to debt and often indicate a debtor is close to running out of viable options for managing finances. 

Missed Payments

The most obvious sign of financial peril is usually when you start consistently missing payments. If you can’t meet your obligations on debts such as loan repayments, alimony, child support and medical bills, it is time to accept your finances are not in a good place. Once you reach the point where even making minimum repayments is not enough to keep you afloat, consider seeking advice from a reputable bankruptcy lawyer. 

Debt Management Plan Qualification

You can only qualify for a debt management plan if you have the financial means to honor a repayment plan. A debt management counselor will go over your budget to determine how much you can afford to repay. If there is nothing there for the counselor to negotiate with, you won’t qualify for the program, which should signal a good time to think about bankruptcy as an option for getting your debts under control. 

Increased Debt Collection Actions

If you are being hounded by mail or telephone by creditors and debt collectors, it is not a sign of financial stability. This usually happens when you have missed payments that are past-due by 30 to 90 days. Creditors can hurt your credit score if you continue to miss payments or do not respond to collection actions. You may be in a position where bankruptcy may be the most suitable option. 

Maxed-Out Credit Cards

When you are in debt, the temptation to ride it out on your credit card limit is often irresistible. Unfortunately, once those credit cards are maxed out, your debt problems are still there and have become significantly direr, due to now owing the balance on those credit cards in additional to the debt you were paying. You can ask to have your line of credit increased, but this is unlikely to happen because of your spending habits. In this scenario, bankruptcy may represent the only way out of debt. 

No Rainy Day Money

We all complain about unexpected personal setbacks and the financial hardship such situations usually entail. Sometimes, personal setbacks are so impactful they can leave you struggling to make ends meet. Prime examples of major situations where you should be considering bankruptcy include being laid off and not being able to find work, and serious medical conditions that leave you with significant medical expenses. 

High-Interest Loans

Debtors who cannot access credit through traditional avenues may turn to high-interest loans. Payday and car title loans may provide you with a short-term answer to debt, but they typically involve high-interest rates. When it comes time to pay off the debt, you will find you are in a worse financial situation than you were before. If you use your car title to borrow money in a title pawn transaction, you risk losing your vehicle if you can’t pay off the loan.

For further help and advice on debt management and bankruptcy options, reach out to the offices of H. Lehman Franklin, P.C., in Georgia. We are a compassionate law firm made up of legal professionals who understand the stress that debt can cause. You can reach our offices at 912-764-9616 or email us at info@hlfranklin.com