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6 years ago · · 7,166 comments

When Is It Time to File for Bankruptcy?

Filing for bankruptcy is never an easy verdict. Actually, it is one of the most intricate financial decisions a person will make in their lifetime. However, once the confirmation to file bankruptcy is settled, individuals will start to experience the saccharine relief that bankruptcy offers, as well as the fresh fiscal start and a stress-free life.

But when exactly should you start seeing bankruptcy as your best option? Here are a few signs to help you determine if bankruptcy is right for you.

Struggling to Pay Your Mortgage

It’s astonishing just how many homeowners fronting foreclosure delay until the very last second (generally at the eve of the sheriff’s sale) prior to taking action. Habitually, once the homeowner has defaulted on her or his mortgage payments, the mortgage holder cannot accept any mortgage payments and commences the foreclosure process. At this stage, there are numerous routes that you can travel to save you house; however, unless you submit the entire amount that you are behind (or attain a loan modification to remedy the arrears), there is no “real” substitute to halt the foreclosure process other than bankruptcy. Once you’ve defaulted, the banks have the right to start a foreclosure and you want to make sure you have met with an attorney immediately to go over your options.

Living Paycheck to Paycheck

If you are in too deep with debt as consequence to exhausting near or all of your paycheck each month, you are the prime candidate for bankruptcy. Per financial experts, your savings should roughly 20% of your net income. Nonetheless, if your hard-earned salary is funneled towards credit card payments, you are in a sticky situation. Not only are you not accumulating money, but handing over the minimum payment indicates you are paying enough to only keep yourself above water and out of defaulting on your debt. This may sound like a smart plan, but the reality is you are sealing your financial dilemma with a band-aid. The monthly interest will be compounded and, following a few months, the lowest payment will become unaffordable. Ultimately, you will have savings in the bank and defaulting on your debt will be inevitable. If this description mirrors your situation, stop your strategy and consider all of your financial options.

Paying Monthly Bills with Credit Cards

If you are paying for gas, food, water, electric, or other miscellaneous home expenses with credit cards while meeting the minimum payments allowed, you are not in the best financial shape you could be in. What’s more, if you are paying interest on all of the expenses, it is only a matter time before your lowest payments begin snowballing to a sum you can no longer pay off. Unfortunately, you are only adding debt to more debt, and not unearthing a solution. Within this downward spiral, there is still an opportunity you can pursue to rid you of this calamitous situation.

At Scura, Wigfield, Heyer, Stevens, & Cammarota, LLP, we are devoted to solving today’s toughest challenges so you and your family can have a fruitful, lasting future. Visit our office for a free consultation and let our trusted lawyers guide you to the right path.

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Danielle is a passionate writer who specializes in writing about financial hardships and methods of resolving them

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