Recognizing The Onset Of Bankruptcy
2005 was a year that saw an unprecedented number of bankruptcy filings. 2006 though was better, although the end of the year did see the numbers the rise again. There are certain signs of bankruptcy that you should be aware of. These will keep you from having to file for bankruptcy.
Low savings
If you have very little amount of savings, it means that you’re not able to put a lot of money aside for the future. This obviously happens because you’re not making enough money as against your expenditure, or are spending it all away.
Struggling to make ends meet
If you’re living from paycheck to paycheck, chances are that you’re not in great financial health. It has been estimated that about 60% of the American people live in this manner, barely managing to save a penny. The situation is worsened in case you suffer a lay off or have to come up with money urgently.
More than 20%
If you happen to be spending more than 20% of your income on various financial obligations, excluding your mortgage, you’re no doubt in trouble. Take care and try and get things in order and back on track.
Making only minimum credit card payments per month
If you’re being forced to pay only the minimum required amount of your monthly credit card bill, it shows that you’re in trouble. And if you’re doing it because you think it won’t hurt you, think again. Paying your credit card bill in this manner will take way more time than if you cleared the full amount every month. If you can afford to do so, there’s no reason that you shouldn’t.
Insurance
People often think that they don’t need insurance. They of course, do change their mind when they actually are in a situation where they need insurance money. Many bankruptcy cases could have been avoided if people had adequate insurance. Things like accidents, health issues, etc, can be taken care of by your insurance so why not take advantage of it.
If you find that you’re doing one or more of the above things, make it right at once. You don’t want to get to the stage where there’s nothing you can do to help yourself except file for bankruptcy.
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- Is Bankruptcy The End Of The Road?
- How To Go About Repairing Your Credit
- Learn How To Manage Your Student Loan Repayments
- Get Creative To Get Out Of Debt
- Do Away With Stress; Stay Away From Credit Card Debt
- Obtain A Low Interest Rate Credit Card
Very well written article. I would just like to add that in case the person happens to be an business man or an industrialist he should also look out for incipient signs of bankruptcy and not wait till the stage comes where he is paying the minimum credit card amount.
When detected in time, a debt counselour will definately have appropriate solutions to not only stem the rot or salvage the best possible out of messy situation.
In the UK a Bankruptcy is no longer the first choice for people with debts over £15,000. The UK Government brought in a new method to help people clear their debts called an IVA. An Individual Voluntary Arrangement can help an applicant clear up to 75% of their debts over a 5 year period. Although not as extreme as Bankruptcy an IVA will still leave the applicant with a very bad credit record for many years.
Here’s a site that has a ton of free bankruptcy resources. Check it out. I got some pretty good articles from them.