When you’ve spent too much on a recent vacation or a new car, you might be able to adjust your lifestyle for the next couple of months to recover financially. However, if your debt just seems to keep piling up, even minimum payments can be a struggle to meet. When is the right time to stop treading water and file for bankruptcy? Here are a few signs you’re ready for a more powerful form of debt relief.
3 Signs You Should File for Bankruptcy
1. You’re Considering a Consolidation Loan
If you’re dealing with multiple forms of debt, such as several credit cards, student loans, or utility bills, you might consider taking out a consolidation loan. This makes monthly payments easier to handle by consolidating several lines of credit into one. Since you pay one sum to one lender—instead of five or 10—you’ll have less of a chance of missing minimum payments. However, debt consolidation doesn’t lower the amount you need to pay, and you’ll still need to finish the payment in a relatively short period of a few years. If your debt is simply too grand to tackle in that time span, consider filing for bankruptcy.
2. You Can’t Pay the Bills
Whether your pay rate was significantly lowered or you had to cover an unexpected medical expense, you might have to start living off of credit cards just to put food on the table. However, when it comes time to pay the lenders back, you might be torn between meeting minimum payments and paying rent or electric bills. If you’re struggling to keep up with the essential expenses and maxing out the credit cards, it’s time to consider bankruptcy.
3. Debt Collectors Keep Calling
If you’re behind on credit card or student loan payments, the lender will likely assign a debt collector to start putting pressure on you. At first, this may start with emails or letters and then advance to calls demanding immediate payment. If you can’t pay, there is a chance the agency could file a lawsuit against you. That’s why it’s important to consider bankruptcy before having to pay additional legal fees to fight the suit. If you file for bankruptcy when the collectors are calling, you’ll get the added relief of an automatic stay—which means they can’t keep harassing you for money or file a suit.
If you’re dealing with any of these issues, The Gil Law Firm in Dothan, AL, can help. Rafael Gil III has been helping residents of Alabama, Georgia, and Florida find debt-relief solutions that work best for them since 2000. In addition to bankruptcy, he also argues personal injury and disability cases. For more information on his practice areas, visit his website, or call (334) 673-0100 to schedule a consultation.