Despite the fact it is an extreme measure for one to declare bankruptcy, it can as well preserve the individual’s peace and money if used in the appropriate way. Also, declaring bankrupt can help an individual back to his or her feet financially. However, declaring bankruptcy can be time consuming and expensive in the long run.
Besides, it can affect the credit rating of an individual even up to 10 years. For sure, there are many factors that will make a consumer file for bankruptcy. But the question is when do you need to file for bankruptcy?
Guidelines on filing for bankruptcy
1. When the consumer is not sure of the credit report
When a consumer is not sure about the debts that are paid, it is important that he or she declares bankrupt. Besides, one can be forced to file for bankruptcy when he or she is not sure of the amount he or she owes to creditors
2. When a person is afraid to talk about money issues with his or her partner
When the consumer is avoiding any topic concerning money issues with his or her partner, it is indeed a sign of an economic disorder.
3. When the consumer receives several phone calls from the credit agencies
It is harmful to the credit report when the creditors keep calling. Apparently, several calls are the worst thing for the individual’s credit report. For sure, one can consider bankruptcy during such time; more so when he or she cannot afford the payments.
4. In case of panic due to unexpected expenses
Sometimes, the unplanned expenses do happen. For instance, vehicle repairs are expenses which normally call for emergency funds. Such expenses can cause a high level of stress along with upheaval in finances. Frankly, with no saving account and limited credit cards, repair or accidents is seemingly a nightmare.
5. When the customer is not making enough money
When an individual is not making enough money for the emergency fund, saving account and those needed to cover the monthly expenses, it can lead to economic distress and eventually bankruptcy.
6. one cannot gather for the routine minimum payments
Failure to pay the minimum amount needed by the lender or credit cards is a good sign that a person is faced with financial distress. Admittedly, such situation cannot be ignored.
7. The consumer is at or over the credit card limit
For a financial health status, one should always remain below 30% of the credit limit in the loans or the credit cards. Nevertheless, if an individual teeters at the limit and is not able to pay the debt, it can lead to problems.