When you are deep in debt and you need a way out, you should explore your options as soon as possible. One of these options may be filing for bankruptcy. However, most people find the thought of declaring bankruptcy quite intimidating.
Knowing the right time to declare bankruptcy can save you from further emotional and legal anguish that comes with being in debt. Here are three questions that can help you understand whether it is time to get your bankruptcy process started:
1. Are you consistently spending more than you are earning?
This is definitely the number one red flag that you need a fresh start in your finances. If your expenditures are greater than your income, especially due to recurrent debts, then you need to sit down and review whether declaring bankruptcy will give you the financial relief you need to restructure your finances. However, do keep in mind that some debts (like child support and college loans) may not go away even after bankruptcy.
2. Are you using your credit card to pay for recurrent bills?
Credit cards are highly convenient. However, they also come with relatively high interest rates. As such, it is never a great idea to depend on your credit cards to keep up with your monthly financial obligations.
3. Are you falling behind on essential payments due to a lack of funds?
This is pretty straightforward, if you are struggling to pay your bills when they are due, this could be indicative that your debts have become non-manageable. It becomes especially worrisome if you cannot pay your mortgage or car loan on time.
The decision to declare bankruptcy can be hard. Find out how you can safeguard your rights while filing for bankruptcy in Florida.