You Should Consider Bankruptcy if… (Part 2 of 2)

By admin • July 16th, 2010

-  You don’t have an emergency fund. Without an emergency fund, you’re living paycheck to paycheck and are vulnerable to any setback, small or large, like a cut-back in hours, furlough days, an across the board pay cut or a job loss.  All of these events are out of your control and any one of them will throw a major wrench into your financial picture and can send you seeking the shelter of the bankruptcy court.

-  You’ve maxed out your credit cards or are charging more than you can pay off each month. Maxing you’re your credit cards means that you are using them for living expenses.  Charging more than you can pay off means you’re going backwards, losing traction, and it’s just a matter of time until you’re maxed out.  Keep in mind credit cards can do pretty much anything they want under their cardholder agreements including unilaterally cutting off credit and raising interest rates, so a card that’s not maxed out today could certainly be tomorrow.

-  You pay the minimum balance on your credit cards. When you can pay the minimum balance on your credit cards you feel ok, even as you’re serving up another helping of Top Roman.  You’re paying your bills, but the truth is you are one interest rate hike away from total annihilation and the credit cards frankly don’t care.  When you call to tell them the hike from 9 to 32% interest makes you unable to make the minimum payment even after you take a paper route before work, they will be less than sympathetic.

-  Your business has failed. Most bankruptcies can be traced back to 1 of 3 events, a failed business, medical crisis or family crisis. Some have experienced all 3.  If you closed a business, you might be surprised to find how many of the businesses’ obligations you took on personally, even if you had a corporation.  Your closed business may haunt you for years as your business landlord, suppliers, partners and creditors show up wanting payment, plus interest and fees.

-  You have no health insurance or inadequate coverage. As we noted above, bankruptcies can be traced back to 1 of 3 events, a failed business, medical crisis or family crisis.  Having no health insurance or inadequate coverage is a big warning sign because one ambulance ride or one hospital admission can change your entire financial world.  If you think health insurance is expensive, take a look at health care itself; absolutely prohibitive.

If any of these warning signs above exist for you, please call Doan Law Firm for a free, no obligation consultation to see how bankruptcy can help alleviate financial stress and give you a fresh start.


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