You hope that you never have to learn more about bankruptcy, as this means that you're facing serious financial trouble. Unfortunately, this is a reality for tens of thousands of people every year.
There are many signs that could point you toward bankruptcy, including the following:
- Constant calls and letters from debt collectors: Not only can this cause a lot of stress in your life, but it could even result in a lawsuit. Filing for bankruptcy provides some protection against debt collectors.
- Wage garnishment: If a creditor gains permission to garnish your wages, this means that your paycheck won't be as large as you've come to expect. This can negatively impact your finances, as you won't have as much money each month for your expenses.
- You're close to losing your home: Receiving a foreclosure notice is extremely scary, as your lender is threatening to repossess your home. By filing for bankruptcy, the automatic stay will kick in. This doesn't stop the foreclosure process entirely, but it can buy you enough time to consider your options and work things out with your lender.
- You're buried in debt: If your debt continues to mount with no end in sight, a bankruptcy filing can help clear some (or most) of this off your plate.
Filing for bankruptcy is a big decision, but you should at least consider it if all signs are pointing you in this direction. Once you learn more about your legal rights and the types of bankruptcy, you can decide which steps to take and how to finally get your finances back in good standing.