Financial hardships can affect anyone for several reasons.
When your debt reaches a point of overwhelming burden, it becomes important to recognize the telltale signs that bankruptcy might be the most suitable course of action.
1. Unmanageable debt
When your debt load becomes unmanageable, it can be challenging to make regular payments. If you find yourself struggling to meet monthly obligations like rent, utilities or minimum credit card payments, it is a clear indicator that your financial situation might require a reset.
2. Creditor harassment
Constant phone calls and letters from creditors can take a toll on your emotional and mental well-being. If experiencing relentless harassment from creditors demanding payment, it might be time to explore bankruptcy as a way to put an end to these aggressive tactics.
3. Legal actions
When dealing with legal actions, such as wage garnishment or lawsuits stemming from unpaid debts, turning to bankruptcy can offer legal safeguards. Initiating bankruptcy proceedings can put a stop to these actions and potentially lead to the discharge of your debts, providing you with a chance to begin anew financially.
4. Zero progress in reducing debt
If, despite your best efforts, you see no improvement in your overall debt situation, it may be time to consider bankruptcy. This is especially true if you only make minimum payments on credit cards, which can lead to a cycle of increasing debt due to high interest rates.
While having to file for bankruptcy may come with negative emotions, it is a solution for many people to get their finances back on track. In 2022 alone, the U.S. courts handled 374,240 non-business bankruptcy filings.