If so, we can help you decide what you should do next. Before we get started, you should know, that we understand everyone’s financial situation is different. With that said, it’s best to meet with us and discuss the specifics of your individual circumstances. Often people don’t realize the seriousness of their financial situation because they are living week-to-week. It is important to take a step back and assess your financial situation. Doing this will help you decide if you can get yourself out of the spot you’re in, or if it is time to consult with an experienced bankruptcy attorney.
To help you evaluate, we’ve put together a list of common indicators that generally show your finances are in trouble. If you answer “yes” to four or more of these questions, you may be in financial trouble and you should contact us for a consultation.
- Are you unsure of how much you actually owe? If this is the case, gather all of your credit card bills and loans together, and add up the balances. This will give you a better understanding of your financial health and help you determine if you can tackle your situation alone. In general, if you can’t pay the total amount off within five years then you have a problem.
- Do you only pay the minimum monthly payments on your credit cards? Although credit card companies recently increased minimum monthly payments, you are not chipping away at the principal unless you pay more than the minimum. Because of the interest rates, you could make minimum payments for the rest of your life and still never completely pay off the debt.
- Are you using credit to pay your monthly expenses, such as groceries or utility bills? If you don’t have any cash left over for necessities after you pay your credit card bills, you are getting deeper in debt every week. You should not be spending more than twenty percent of your net income on credit card bills.
- Are you using one credit card to pay another? Although low interest or no interest credit card offers come in the mail every day, “surfing” your debt (moving the balance of one card to another card) is a sign you are carrying too much debt.
- Are you using cash advance checks that credit companies send in the mail to deposit money into your checking account so you can pay bills? If so, this is another indication that you are spending more than you should and that you may have a difficult time paying back your debts.
- Are creditors harassing you or suing you? Collectors are persistent and not very pleasant. If you’re screening your phone calls – not answering until you know whether or not the caller is a collector – you’re in debt over your head. Furthermore, if the creditor sues you, your wages can be garnished, your bank account can be frozen, or a lien can be taken against your home.
- Are you dipping into your savings or your retirement to pay bills? Your “golden years” will not be golden if you have not protected the money you set aside for retirement.
- Are you taking out “payday” loans or pawning your belongings to come up with cash? Even though these practices seem to help you make ends meet, they are actually costing you money – you pay a fee for the payday loan, and pawnbrokers do not give you full value on your belongings. Sadly, if you keep going down the same road you will not have the funds to buy the items back.
- Do you “float” checks, or bounce them? Check floating means you send a check to pay a bill, hoping the vendor isn’t going to cash it until your paycheck hits the bank. This is illegal in some states. If the check is cashed before your paycheck gets there you will have bounced a check and have to pay bank fees.
- Is your debt affecting people you love? Are your wages being garnished? Are you on the verge of losing your home? Are you personally stressed about the amount of debt you have? If you answered yes, to any of these questions your debt may be having a negative impact on someone you love. Financial stress can lead to physical, emotional and relationship stress. If this is happening, it may be time to contact us.
This list should be used as a means of the starting a “conversation” with yourself about your financial health. If you answered “yes” to four or more of the things listed above, you should make an appointment with a bankruptcy attorney at our firm. We can help you analyze your financial situation and recommend a course of action that will help you get out of trouble.