Nearly everyone goes through financial difficulties at some point in their life. It’s not uncommon to tighten your belt for a period of time when there is a job loss – or to refinance a home to lower your monthly payments. But at some point, financial challenges cross a line and go from simply frustrating to seemingly impossible.
Once the money issues become overwhelming, bankruptcy may be an option. How do you know when you’ve reached that point?
Here are six indicators that it may be time to call a bankruptcy attorney.
Can’t Pay Basic Bills
It is one thing to have very little left after paying for the rent or mortgage, utilities, and groceries. It is another thing entirely to fall short of the amount needed to cover these basic expenses. Add in a car payment or credit card bill, and you have a recipe for anxiety and stress.
Not being able to pay your most essential expenses is a strong indicator that you may need to take further action to get your financial life under control.
Defaulting on Loan Payments
Unfortunately, the adverse impact on your credit report may also cause higher interest rates for other credit instruments you hold.
In other words, missing payments have a far-reaching impact beyond that one monthly bill. It may not be a cause for concern if it happens infrequently, but you may want to call a Sarasota bankruptcy attorney if missing payments are becoming commonplace.
Stealing from Retirement to Pay Bills
If you find yourself pulling money out of a 401K to meet basic monthly bills, it may be time to investigate bankruptcy as an option.
Not only are you typically subject to high tax penalties by pulling funds prematurely, but you are risking the stability of your financial future. If you pay a few bills now only to suffer in a few months or years, the solution may not be as effective as you’d hoped.
The Phone Calls Never Stop
At the onset of COVID, many lenders and financial institutions postponed their collections efforts – but many have begun aggressively seeking payments again.
You may find yourself on the wrong end of a lawsuit if the calls go unanswered for too long. If you are in a situation that your phone is ringing nonstop and collectors are growing more insistent, it may be time to take a proactive step.
Filing for bankruptcy will stop collector calls and give you peace while you work out your financial situation.
Wage Garnishment Has Begun
If you have been sued by a creditor and have no other way to pay them, they may seek the ability to garnish your wages. Not only is this a financial invasion of sorts, but it dramatically impacts your ability to pay other bills on time and to manage your financial recovery.
Filing for bankruptcy will stop the wage garnishment process- a very good reason to call an attorney and look into the bankruptcy solution.
Home Foreclosure is Looming
Losing the family home is one of the most traumatizing and severe results of ongoing financial problems. Saving your home – or at least gaining control of the sales process versus losing it to the bank – is a great reason to call a professional bankruptcy attorney for advice.
Financial challenges are common, but the solution is not the same for everyone. If any of the scenarios outlined above apply to you, don’t panic – call the Sarasota law offices of Richard V. Ellis. We have the expertise you need to make the right decision for you and your family.