Thousands of people file for bankruptcy every year. Many of these stories fly under the radar because news outlets tend to only focus on companies filing for bankruptcy. One recent local example includes a Louisiana company that owns multiple nursing homes that had to file for bankruptcy.
No one enjoys thinking about the possibility of filing for bankruptcy. However, it is vital to remain grounded in reality. In some circumstances, it may be the only way to get out of debt, but it is not right for everyone. Here are three signs you need to start thinking about bankruptcy.
1. You have multiple kinds of debt
Some people only rack up one type of debt. For example, some people merely fall behind on their credit card bills. As long as this debt does not get too out of control, you should be able to pay it off over time with the right habits. However, when you have to contend with student loan debt, medical debt and credit card debt, you may need to look into bankruptcy to get out from all of them.
2. You always pay your bills late
Missing a bill once is no reason for concern. When you cannot pay any of your bills, you have a problem. You will continuously receive past-due notices in the mail, and you may feel scared to answer the phone for fear a debt collector will be on the other end. At this time, it may work to your advantage to consider bankruptcy.
3. Your income cannot increase
The problem with debt is it is hard to eliminate if you cannot bring in any more income. Unless you can get a raise at work or come into a good-sized inheritance, your debt will continue to be there while your wages stagnate.