Life can be quite unpredictable. And part of this unpredictability may involve going through a rough patch – financially speaking. If you are going through a difficult time, with creditors and collection agencies in hot pursuit, you need to figure out a solution.
One of the remedies you can consider when struggling with debt is declaring bankruptcy. The decision to declare bankruptcy is never an easy one to make. So how do you tell it’s time to declare bankruptcy?
Here are three questions that can help you determine when to declare bankruptcy
Are you struggling to keep up with your bills?
From mortgages to utility and grocery bills, it takes money to run a household. Struggling to keep up with your bills could be indicative that your debts are overwhelming or that you are spending more than you are earning. And if some of these debts are secured, like car loans and mortgages, then declaring Chapter 13 bankruptcy can help you come up with a repayment plan that suits your current financial situation.
Are you relying on your credit cards to get by?
It is absolutely okay to occasionally use your credit card to take care of emergencies. However, if you are relying on your credit cards for daily expenses like gas and groceries, then there might be a problem. Over time, you might max out your credit cards and run into difficulty paying back your debt. Besides, a higher credit-to-debt ratio will greatly hurt your credit score.
Are creditors threatening lawsuits?
If you can’t pay your debts, creditors might sue you. Consequently, liens might be placed on your property. Worse still, your wages may be garnished, which can worsen your financial situation. Depending on the debts in question, bankruptcy might give you a fresh start.
Bankruptcy can give your finances a new lease of life if you are caught up in debt. Find out how you can protect your rights and interests while filing for bankruptcy in Alabama.