10 Signs you are heading for Bankruptcy

When a court enters an order of relief when a bankruptcy charge is filed. It is very painful to sing for the facility but sometime it is inevitable.

The first sign is when your credit card balance is at its limit. Others include zero savings, inability to earn enough to pay down debt. More are when you forgo necessary items or take loans against you retirement account.

A bad sign is when you use your life insurance to stay current debt, are not credit worthy or you rob Peter to pay Paul. Another sure sign is when your account goes negative during the month, you are behind on home/vehicle payments and debt collector comes calling. . Here 10 signs you are heading for bankruptcy.

Signs of impending Bankruptcy

•         Credit card balance is at its limit

•         Zero savings

•         Inability to earn enough to pay down debt

•         When you forgo necessary items

•         Take loans against you retirement account.

•         When you use your life insurance to stay current debt

•         Not credit worthy

•         Rob Peter to pay Paul

•         When your account goes negative during the month

•         Behind on home/vehicle payments

•         Debt collector comes calling

1.Creditors Rage

A sure sign you are heading for bankruptcy is when creditors come calling, sue or send letters. This is a bad sign because it means you have defaulted far enough to be labeled bad debt.

The lenders send debt collectors in a vicious and persistent cycle to collect the loan. The creditors result to harassment, intimidation and levies. The final assault would end in court.

2. You are behind on home loans

You know you are heading for bankruptcy when you get behind on home loans. Home loans are lifetime investment and a place to live. Mortgage default is a serious indication of impending trouble.

3. You are behind on vehicle loan

Getting behind on vehicle loan is not that terrible except if it is commercial vehicle and your source of livelihood. The car becomes a priority and default has dire consequences.

4. Negative bank account

If your bank account goes negative during the month you are in trouble. Bouncing payments before next paycheck is bad.

This is a sure indicator of overspending, bad planning and bankruptcy. If the trend is not checked you are advancing towards total penury.

 5. Incessant Borrowing

I know an individual who makes good earnings yet is always broke. This is because of huge expenses spent on his large family and outstanding debts. The person borrows from one source and pays to the other.

Robbing Peter to pay Paul is a very bad strategy. The individual has serious cash flow problems. Taking from one creditor to cover some bills and paying another is very bad economics.

6. Creditors refuse to approve loans

You are heading for trouble when creditors see your debt and determine that the odds of paying back is remote.

If your overall debt load is high, creditor see you as a risk. This might occur despite balancing payment, you are refused loan approval.

7. Using life insurance and retirement account

Having a life insurance or retirement account is to facilitate a source of income in your old age. But if you find yourself taking out loans against insurance policy or retirement account to service a loan you are in trouble.

Large monthly payments are automatically deducted from your paycheck to service retirement account loans. Using this will provide added problems of large retirement account loan payments.

8. Foregoing necessary items

When you find yourself forgoing necessary items like toothpaste, soap, foodstuff you are in trouble. If you can’t maintain your vehicle or pay health insurance that is a bad sign.

Skipping basic necessities to keep up debt payments is a sure sign you are heading for bankruptcy.

9. Low earning

If you are unable to earn enough to keep up with your debts you are in trouble. If the minimum cost to maintain the balance on your credit card is lacking bad omen. Some people work two to three jobs or overtime yet the debt persists.

10. Poor saving culture

Saving is a good way to keep some money for the rainy day. You earn low interest and gradually increase the account.

If you have no way to save each month your finances is in trouble. A sure sign of bankruptcy is when your debt gobble up your earning leaving no room to save

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