Ditch the Denial: 5 Signs It’s Time to Declare Bankruptcy
Waving the white flag of bankruptcy leaves many filers feeling like financial failures who have given up and lost their chances of getting their fiscal feet back underneath them. The primary concerns preventing debtors from grabbing the lifesaver as they drown in debt are forced surrendering of properties and possessions, a lifetime of bad credit and lending rejections, and the embarrassment associated with publicly exposing your financial situation.
However, declaring bankruptcy doesn’t have to be the end-all-be-all of financial success. Busting common liquidation myths and wrapping your head around facts can motivate you to obtain the relief you desperately need and prosper long-term.
There are currently no laws preventing creditors from extending credit to you after bankruptcy. Although your credit will take a hit for several years, you may be a hot commodity to specific lenders after declaring. Bankruptcy can also eliminate pesky old tax liabilities, prevent lenders from pursuing aggressive collections, and offer you a desperately needed fresh start.
Filing with an attorney vs. without
Once you’ve accepted your financial fate, you’ll need to weigh the pros and cons of filing with an attorney. Although filing independently may sound appealing, it certainly comes with a price. Without the expert advice of an attorney, you risk misunderstanding complex regulations, ending in critical, expensive mistakes or possible rejection.
If you choose to file alone, be sure to take a pre-bankruptcy course and do extensive research to determine which type is best for you. Hiring an accredited, expert bankruptcy lawyer from a firm like this can save you heaps of liquidation homework and sidestep avoidable blunders.
If you’re still unsure whether to pull the trigger and declare bankruptcy, consult these five signs it’s time to ditch the denial.
You’re constantly screening calls from debt collectors
If you cringe a little bit every time you hear your phone ring, you’ve probably received one too many calls from debt collectors and collections companies. Collection agencies often utilize aggressive tactics to obtain payments, which can escalate in frequency as you continue to ignore their requests. Without a strategy in place to make the necessary payments, filing for bankruptcy may be the only way to get debt collectors off your back.
Depleted income and savings
Getting caught in the debt cycle requires a significant boost in your income to break the chain. While taking additional jobs or dipping into savings are options for some, a depleted fall-back account means there’s little hope of obtaining adequate funds to avoid bankruptcy. If your income isn’t bound to improve shortly, it’s unlikely that you’ll suddenly be able to pay all of your accumulating debts promptly.
You’re critically behind on payments
Suppose you’re so low on cash that you’re finding yourself using loans, credit cards, or retirement funds for both bills and day-to-day necessities like groceries or gas. In that case, you run the risk of racking up incredible amounts of credit card debt. When paying your mortgage or taking care of other basics feels impossible each month, bankruptcy may be required to get you back on track.
Not filing for bankruptcy will negatively impact loved ones
While financial ruin is undoubtedly distressing to the individual experiencing it, they may not be the only ones impacted long-term. Declaring bankruptcy can help you avoid putting your family member’s financial health in jeopardy by giving you a clean sweep and allowing you to provide for those you love, bypassing future budgetary dependency on family members.
The stress is keeping you up at night
If you’re suffering from anxiety, sadness, hopelessness, or sleep-loss over your monetary challenges, it’s may be time to make a change. Poor financial health can impede mental health, making it even more challenging to step into a responsible financial routine. Under Prioritizing your mental, physical, and economic health is never worth it, and you can take that to the bank.
Final thoughts
Declaring bankruptcy isn’t an easy decision—especially with alienating, heavy stigmas surrounding financial failure. However, monetary liquidation processes can help pull you out of depts’ deep waters and set you on a dry path to success.