Signs you are headed for bankruptcy
You should really be aware of your financial well-being at all times. You might think that spending $50 here or there cannot possible bring financial ruin to yourself, but it is the combination of all the little $50 here and there that can lead to your downfall. You would never think that one little purchase/misstep can force you into bankruptcy, but if you keep ignoring and give no importance to how you are managing your money, bankruptcy can come upon you quicker than you can imagine. Here are some signs that you don’t want to find yourself in:
You have no savings
Not saving any of your income is the worst thing that you can ever do when you started working. Savings is the single most important thing you should have. You can be making $20K or $1M a year, and you should still save for the rainy days. How would you know if you are not going to be laid off like the massive laid off of the 2008-2009 corporate world? What if you have to take a leave of absence to care for a loved one? Where would you have the money to support yourself. Without any savings, you are most likely to incur debt along the way using credit card and the like. The more debt you accumulate, the more financially strapped you will be. Then one day you might just find yourself at the footstep of bankruptcy.
You do not know the terms of your mortgage
If you own a home, make sure you know the terms and condition of your mortgage. Is your loan a fixed rate loan, an adjustable rate mortgage (also known as ARM), a zero interest loan, is there an early repayment penalty? All these are crucial information you will need in order to budget your money accordingly. If you fail to comprehend the terms and conditions of your mortgage loan, you might over-extend yourself. One day you might find yourself with a much bigger mortgage payment, and without any real savings, you are again looking at the possibility of filing for bankruptcy protection.
One day you are surprised by a large credit card statement
With credit so easily accessible in the credit card, a lot of people tend to charge everything that they buy, whether they need it or not, or if they can afford it or not. If you are so accustomed to buying everything using the credit card, you should think twice now when you are “charging” for that flat screen TV. Ask yourself this: do I really need this? Can I afford this? Remember, it is this instant gratification attitude that can cause you to rack up credit card debt rather quickly. If you cannot payoff these debt, you will be looking at the possibility of bankruptcy yet once again.
You are using cash advance from credit card or payday loan
If you need to resort to using cash advance or payday loan to finance a purchase, or worst yet, for your daily expenses, then you are in some serious debt. These are some of the most expensive ways to get temporary relief financially. They are not only expensive in terms of interest fees they charge, they also sets up a bad precedence for you. You might find it easy to borrow money from the credit card or using the payday loan that you ended up using more and mor eoften. Before long, you find yourself in such more debt and bankruptcy looks inevitable now.
You are forever transferring balance from one credit card to another
Credit card companies are forever promoting balance transfer checks for low interest rate with extend period of time to pay it off. Don’t get into the habit of doing this. If you find yourself with a lot of options to move your debt around, you will also find a way to finance something you don’t really need. You would rationalize it by telling yourself that the interest rate is low and you have all the time in the world to pay it off. Don’t fall into this trap because eventually you will be saddled with so much debt again, you will have to declare bankruptcy.
Try to be smart about your money, make a budget that you can live with and stick to it. Your financial well-being is in your own hands and try your best not to venture down the path of bankruptcy. Bankruptcy is no laughing matter, it is a legal responsibility you will have to live with for the rest of your life.