Will It Pass Or Is It Time For Bankruptcy?

Posted on: 27 May 2022

Financial problems have left many destitute after the COVID virus. However, not everyone needs to take the major step of declaring bankruptcy for a temporary budgeting shortfall. To help you decide if now is the time to declare bankruptcy, read below for the warning signs of problems too big to just go away.

Deficits in Income

Over the past several months, those who have earned less than they needed to pay their bills may not be headed on the upswing in time to save themselves. A month or three of not having enough income to pay the bills could be a temporary issue. If it's been longer than a few months, however, you may need to either add more income by taking another job or eliminate your debts by declaring bankruptcy.

Credit Cards Are a Main Form of Support

If you are using your credit cards to pay for utilities, food, fuel, and other necessities and you are nearing the limits on your cards, you may be headed for a Chapter 7 filing. While you may feel fortunate to have enough credit on the cards to pay for some of your needs, the way the payments and balances work can lead to even more problems. The interest rates and low minimum balances will eventually lead to making payments that don't result in getting any additional credit back to spend. That can leave you with no options.

You Are Dipping into Your Retirement Funds to Pay Expenses

Unexpected expenses are a way of life. That is why financial experts advise consumers to set aside several thousand dollars in an emergency fund to cover things like a roof repair, a broken air-conditioning system, or a vehicle repair. Borrowing from your 401(k), for example, can lead to not only a depleted fund but to other problems when you are not able to pay it back.

You Put Off Major Needs

When a home or vehicle needs expensive but much-needed maintenance, it's easy to put things off until things get better. However, things may not get any better and that can lead to a deteriorating home or vehicle. To make matters worse, many in the US are forced to stop buying needed medication, going to the dentist, or seeking medical care for life-threatening conditions. If this sounds familiar, consider making the bankruptcy choice so that you can preserve your assets and your health.

Visit a local law office like Knollmeyer Law Office, PA for more info.