Top 10 Signs Bankruptcy Should Be Considered

If you feel like your budget is getting stretched these days, you’re not alone.  Prices seem to be constantly on the rise while real wage rates have stagnated.  It’s putting a lot of strain on consumers.  Look no further for proof than three-fourths of people are relying on buy now, pay later services for essentials like groceries and clothes for their kids.  Inquiries related to foreclosures, debt, and bankruptcy are climbing back toward pre-pandemic highs. Stress in the household balance sheet is translating directly into more legal issues, a signal that financial strain is becoming more entrenched.

Life is stressful enough without having to live with persistent debt. Most people do not know the first thing about the options under bankruptcy.  It’s one of several options that you should consider, especially if you’re facing one or more of these stressors right now: 

1. Overwhelming Debt:

Unsecured debts like credit cards, medical bills, or personal loans have become impossible to manage, and minimum payments aren’t even reducing the principal.

2. Consistent Struggle To Pay Bills:

Every month involves picking which bills to pay late, and there’s no room for error in your finances.

3. Creditors Are Suing or Threatening Lawsuits:

If creditors have started legal actions or threaten to do so, bankruptcy can provide court protection and automatic stays.

4. Risk of Foreclosure or Car Repossession:

Falling far behind on mortgage or auto payments may risk losing a home or vehicle, and bankruptcy may help stop these actions.

5. Using Credit Cards for Necessities:

Regularly using credit for essentials like groceries or rent signals financial instability.

6. Borrowing Money to Pay Debts:

The need to borrow from friends, payday lenders, or take new loans just to pay existing debt is a warning sign.

7. Drained Savings or Retirement Accounts:

If savings or retirement funds are depleted to cover debts or living expenses, bankruptcy can help protect future financial security.

8. Persistent Collection Calls or Wage Garnishments:

Harassment by collectors, or garnishment of wages, are serious indications that debt has overtaken available resources.

9. Living Paycheck to Paycheck with No Emergency Buffer:

There’s never any extra money for savings, emergencies, or leisure, leading to chronic financial stress.

10. Credit Card Dependency:

When available credit is shrinking and paying off one card with another becomes routine, financial collapse may be imminent.

What You Should Do Next

If several of these warning signs describe the current situation, bankruptcy may offer legal relief and a path to rebuild. Consulting with one of our experienced Pennsylvania bankruptcy attorneys is wise to understand legal options and protect important assets such as homes and retirement accounts.

When to Seek Professional Guidance

Many people wait too long before seeking help, which can make recovery harder. Early intervention and legal advice can clarify options, including alternatives to bankruptcy, such as debt negotiation or consolidation.  If these signs sound familiar, exploring bankruptcy isn't admitting defeat - it's a proactive step to regain financial health with guidance from a qualified professional.