Can you recognize the financial warning signs of bankruptcy?

| Feb 8, 2019 | Uncategorized |

Many Americans struggle with their finances at one point or another. It can be easy to miscalculate a budget or forget about a bill.

However, when financial problems are continually cropping up, it may be a symptom of a larger issue. Here are a few warning signs that may point to a larger problem:

Paying off debt via credit

Transferring a credit card balance to a different card to avoid default does not solve the issue. Neither does borrowing against a mortgage.

It’s important to understand where the debt is coming from and why you keep accumulating it.

If you are using debt to pay a debt, you are digging a bigger hole. It simply allows you to take on more debt without the safety net you had the first time.

Only meeting minimum payments

Credit card companies are all too happy to collect minimum payments. If you are only able to meet the monthly minimum it means you are racking up interest fees and still adding to your debts. While it may feel impossible to ever get out from under debt, focus on paying as much as you can over the minimum every month.

Researching techniques like the snowball method or avalanche method can help you understand how people can painlessly tackle their credit card debt via more than a monthly minimum.

Never adding to your savings

Everyone should be adding something to savings every month. As it stands, 40 percent of all Americans cannot handle a $400 emergency expense. Make an effort to start a savings fund. Set aside $25 from each paycheck. That may feel insufficient, but it’s a start. Savings can protect you from unexpected financial emergencies.

Use all tools available

If you find yourself continually chipping away at debt but not getting anywhere, you’re not alone. Unfortunately, many people discount bankruptcy as an option for their financial struggles.

Bankruptcy can be the new start you need to find your financial footing and move on with your life. If you’re struggling to meet debt obligations, a knowledgeable bankruptcy attorney can walk you through your options.