4 Signs That You Should Consider Bankruptcy
Even the best budgeter and financial planner can suffer financial difficulties. Sudden job loss or an unexpected illness can destroy even the best-planned budget.
You can fall behind on your bills, be dealing with collection calls that border on harassment and are not sure what to do next.
If you are drowning in debt, these four signs may indicate that bankruptcy is the answer.
BALANCES REMAIN THE SAME
If your balances never seem to get any smaller, even though you are making payments, you may be a candidate for bankruptcy.
Paying the minimum payment alone on your debt is barely enough to pay the average credit card off. Therefore, if you have gotten behind, you may feel as if the balances never change, despite your payments.
If you cannot pay your entire debt, excluding mortgages and vehicles, within three years, you may want to consider filing bankruptcy.
USING RETIREMENT FUNDS FOR ROUTINE DEBTS
If you are considering withdrawing money from your pension or 401k account, or if you have already withdrawn money to pay regular monthly bills, you may be a candidate for bankruptcy.
Paying bills using retirement funds will cost you more in the future when you don’t have those funds available when it is time to retire. In addition, taking money out of your retirement fund could actually make your situation worse as you may owe a tax penalty on the funds withdrawn.
YOUR MORTGAGE IS UNDERWATER
If your mortgage is significantly higher than the value of your home, you are what is known as “upside down” or “underwater” in your mortgage.
Bankruptcy can help you catch up your payments or work with the mortgage company to modify your loan. If your home does go into foreclosure, you can erase debt you may owe if the home sells for less than you owe and you can eliminate a home equity loan or second mortgage.
You can also avoid a large tax bill due to cancellation of debt income and you can use any money that you were using on other debts to catch up your mortgage payment.
YOUR FAMILY WILL SUFFER IF YOU DON’T FILE FOR BACNKRUPTCY
If you have children or care for an elderly or disabled family member, filing bankruptcy may eliminate a significant burden. Caring for children or someone who is disabled is stressful enough without debt collectors hounding you. Your children will more than likely suffer from the harassing phone calls you are receiving as well. Bankruptcy helps you get a fresh financial start and allows you to focus on your family rather than your debts.
If you are struggling financially and just can’t seem to get ahead, contact us today to learn how we can help you get a fresh financial start. Complete our free consultation query form or give us a call today so that we can start you on your path to a new financial future.