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Everyone knows of the negative stigma that bankruptcy carries. Most people never even comprehend that they would one day have to file for bankruptcy. While bankruptcy is not in anyway life threatening, it is still clearly a last ditch effort that you should avoid if possible. For some, bankruptcy is, in fact, a fresh start; something necessary for some businesses and individuals to clear their slate. In October 2005, new bankruptcy laws went into effect in the United States. These laws make it more difficult for many people to file Chapter 7, the bankruptcy that wipes out all of one’s unsecured debt. Since bankruptcy is not necessarily an option for everyone anymore, you should be alert to any signals that a financial crisis is on the horizon. If you learn to recognize it, Knockout Debt can step in before it becomes a tragedy.
A primary signal of financial trouble is when your credit card bills rise month to month. If your balances are consistently rising, even while you are making some payments, beware. This is a warning that you are unable to pay down your debts and could end in bankruptcy. Review your last three statements from a credit card. Are the balances rising? If so, you may need some help. You should also check to see how much you are paying each month to these creditors. Are barely able to afford the minimums? Are you paying an amount equal to 25% or more of your cash flow? These are indicators of an impending financial crisis.
Have you recently used a home equity loan or line of credit to pay down your debt? Beware. If you rely too heavily on this option you could be putting your house at risk. These loans are secured by your home. These loans are terrific if you have cash flow and are just looking for an easy way to reduce your interest rates. If however, you are merely moving your debt from one place to another to try to bide time, you should take it as a warning sign that you need financial help or assistance. When people “Rob Peter to Pay Paul” it is frequently as sign that bankruptcy is around the corner.
Another obvious signal is if you cannot afford to carry insurance. Life, car and medical insurance are items that today’s adult cannot afford to be without. They are not inexpensive. If your budget is so tight that you cannot pay your premiums, then you should take this as a sign of things to come. Insurance premiums should be part of your budget.
Most warning signs, or at least the most obvious, are related to your immediate cash flows or financial situation. There are, however, other factors, that are more or less outside your control. For example, your employment status and salary could change overnight. If you do not have insurance, a natural disaster could place untold stress on your budget. Just look at the results of all the hurricanes in 2005. You also may have cosigned for a family member’s or friend’s loan or business. If something happens to them or their business, you are financially liable and this could push your situation over the edge. You should never assume financial responsibility for another’s actions unless you can afford to handle a potential cash call.
Lastly, a lawsuit could push you into bankruptcy. Some lawsuits could be the result of an accident and cannot be avoided. Others are frivolous. Still others could be from a creditor trying to collect on unpaid debts. These suits need to be avoided early on with financial planning or professional assistance. If you fall too far behind and do not bring in a professional to help, a lawsuit could jeopardize your home or car, pushing you into an unwanted bankruptcy.
If any of these signs are apparent in your situation, you need to act now. Knockout Debt has assisted thousands of consumers in situations such as these. We know how to help you avoid bankruptcy and can get you back on safer financial ground. Our debt consultants can tailor a plan for you that can reduce your debt balances by 40-60%. Repay your debts more quickly and avoid bankruptcy. For a FREE, no obligation consultation, click here Or, call toll-free, 888-443-3328 to speak with a trained debt consultant now. If you are seeing any bankruptcy warning signals, you really have little time to waste.
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