Bankruptcy is a scary and challenging decision to make, but in some cases it just makes sense. Although this should be a last resort, it's important to know when that last resort is upon you. There are a few distinct signs that you might want to consider filing for bankruptcy. Ignoring these signs could create even more financial problems.

You're Living Paycheck to Paycheck

According to Debt.org, the average person filing for bankruptcy makes less than $30,000 annually. This is often not enough to cover the many expenses of an average family. When you are living paycheck to paycheck you may start relying on loans and credit cards to make ends meet. This can quickly snowball into a debt problem you can't manage. Bankruptcy could be a solution.

Credit Card Bills Are Taking Your Net Income

If your minimum credit card bills are taking up the majority of your bring-home pay, you are headed for problems. This is not sustainable for your monthly expenses. Eventually, you will run into an emergency expense or something unexpected will happen and you'll start missing those payments. Once you start missing your credit card payments, your debt problem can quickly snowball.

You're Using Savings to Pay Monthly Expenses

Dipping into savings to pay monthly expenses is always a bad sign. This means that your income is not enough to accommodate monthly expenses, debt payments, and regular savings. If you use your savings to pay monthly expenses, you will not have savings to pay for emergencies.

You're Using Credit Cards Regularly

Credit cards are intended to be used, however, the ideal way to use a credit card would be to take care of purchases throughout the month and then pay the credit card balance off at the end of the month. If you're running up the balance of the card to take care of monthly necessities, you will quickly discover that this isn't a sustainable financial plan.

You're Hiding Your Financial Situation From Your Family

If you are feeling shame or fear over your financial situation, this is a sign that you're already in rough waters. Some people will attempt to hide their financial situation from their spouse or family. This means that you're already feeling overwhelmed and helpless. A bankruptcy firm can help you get out of this situation.

If you're considering bankruptcy, please contact us today. We are here to advise you during this difficult time. Reach out to Hampilos & Associates Ltd today.