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You have been employed for years now. Because you have a stable job, you’ve been able to sustain your daily expenses and live independently. You work 9-5 from Mondays to Sundays, pay your bills when you receive your salary and continue on living. This has been your routine for years, and although you would want to receive a higher salary, you’ve been able to make both ends meet. You’ve been able to eat three times a day and live in a comfortable apartment. However, you’ve noticed that recently, it’s becoming difficult for you to manage your finances. You’ve been purchasing and paying the same things monthly, but most of the time, you’re left with a zero bank account. You often even wonder where your money went. If this has been your dilemma for quite some time now, you might be heading towards bankruptcy, and you don’t even know it yet.
You might have thought that bankruptcy only happens in businesses, but you’re wrong. Even an individual like you can experience bankruptcy, and it’s essential that you know what the signs of bankruptcy are so you can take measures which will not make your situation worse. To help you out, the list below contains information on the key signs of bankruptcy that you should be aware. All of the things listed here will contribute to your financial decisions in the future.
- Your minimum monthly payments are larger than what you earn every month: This one’s pretty obvious. If you’re paying expenses more than what you earn, chances are, you have resorted to acquiring debts from different financial institutions just to pay for all of them. If you have one debt and pay it a month thereafter, good. But if you still have troubles paying this, you could end up in a cycle of acquiring debts to pay a debt made in the past. It’s like debt after debt after debt – and it can very challenging to solve that kind of problem.
- You can’t afford to lose your job: No matter how stressful your job and your bosses are, you can’t quit your job because you don’t know how to pay for your monthly rent and groceries. You’re fully dependent on what you earn, and if you’d quit your job right now, you don’t know where you’ll get finances. If this has been happening to you, it is bad news. This is one of the telltale signs that you’re heading towards bankruptcy.
- You don’t have enough savings: Sure, you can still pay for your expenses with your job, but can you still do the same when emergencies happen? Can you still continue to pay your monthly mortgage when you or other family members need immediate medical attention? Having sufficient savings is vital to ensure that you can still continue living (literally) once there are unprecedented occurrences. Financial advisers would recommend having a savings worth 3-6 months of your living expenses. Once you have this amount in your bank account, you’ll be able to pay your everyday living expenses in case you lose your job.
- You’re buying everyday items with your credit card: One of the reasons why credit cards are useful is because it serves as a tool to manage your money conveniently. It helps you make payments while giving yourself a short-term loan where you can pay for big purchases like cars and furniture, and pay the debt in a short amount of time. However, if you see yourself using your credit card when you’re out to buy medicines or groceries, you might be living dangerously beyond your means. This might put you at risk for bankruptcy.
- You’ve stopped answering your phone and e-mails: Your days will never be complete without a collector contacting you. While some collectors are very subtle in how they want your payment, some are very aggressive and you can no longer handle it. To avoid from having heated arguments with a collector, you’ve decided to have your own escape plan – and that is to never answer calls and emails. You already know what the messages are, you just don’t know how to pay them back yet.
- You’ve become irritable and antisocial: You might not have thought about this but when you’re heading towards bankruptcy, you’d rather spend time alone at home rather than meeting out with friends. You stay away from going out because you know this will require you to shell out some cash, and you don’t want your friends to judge you as someone who’s “cheap,” so having meals at home alone is the best way for you to go.
You might see yourself in one of these situations and might conclude that indeed, you’re heading towards bankruptcy. The points you’ve read in this article might not be new to you anymore because you know you’ve been going through the same things. But even if that’s the case, you don’t have to worry. There are still different ways on how you can prevent yourself from bankruptcy. You’re able to determine the signs already, so it’ll be easier for you to decide what to do next.
While there are so many things you can do on your own to stray away from bankruptcy, seeking the help of professionals can also go a long way. This website offers services which will help you in your bankruptcy woes.
Gail Wilson has more than 12 years of experience under her belt when it comes to business, which she is currently sharing with her clients and peers as part of the law industry. She writes pieces on various law topics that she hopes could help the common reader with their concerns. A family oriented, Gail loves spending time with her husband and two sons during her free time.