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Should you file for Chapter 7 bankruptcy? 5 signs to watch out for

On Behalf of | Jun 7, 2024 | Chapter 7 Bankruptcy

Filing for bankruptcy often leaves an unsavory impression, which is why some people choose to battle mounting debt instead, even if they are already at their wits’ end and unable to make timely payments.

When paying off your debt seems too overwhelming, you may consider filing for Chapter 7 bankruptcy, also known as the liquidation bankruptcy. It is known for being a quick, simple, and common type of bankruptcy which may allow you to discharge qualifying debt at the end of the process.

But when should you file for bankruptcy? If you answer “yes” to any of the 5 signs below, it might be the right time:

You miss payments on purpose

Missing a payment of sending a check late occasionally is not uncommon. When you start sacrificing bills to have sufficient funds to pay another bill, then you might want to consider filing for bankruptcy.

Your creditors start harassing you

When failing to make timely payments become a repeat offense, creditors will often turn to collection agencies to collect funds from you. These agencies usually employ a barrage of communication methods to seek you out, wear you down, and get you to pay up. If these start to bother you, you might want to consider bankruptcy as a solution.

You have maxed out your credit cards

When you notice that all of your cards – both credit cards and cards that you may use for emergency purposes – have reached their credit limit, you might want to examine your spending and explore other options.

You use one debt source to pay another

Rotating debt is a common tactic when you have multiple debts to pay, but when you start paying with credit cards and have limited ability to pay off the new debt, you might need to brace yourself for insurmountable debt.

A personal financial setback is not an option

Job loss, a medical emergency, home repair, a financial emergency. While these situations are unfortunate, they are not uncommon. If you do not have the funds necessary to recover from any of these, bankruptcy might be your way out.

Chapter 7 bankruptcy can give you the chance to build a more stable financial future. It can help you reset your financial standing and give you some breathing room to settle your debts.

An experienced lawyer can help you learn more about how bankruptcy can benefit you.