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Seven Reasons to File for a Bankruptcy
Declaring bankruptcy is always going to be a hard decision. But if done the right way and at the right time it can save you money, preserve your peace of mind, and get you out of a financial hole. If your debt is spiraling out of control, don’t wait until it is too late. Below are seven scenarios that indicate your financial situation is out of control and bankruptcy may offer a way out.

1. You Are Using Credit Cards for Everyday Necessities
   Using credit cards to pay for everyday items such as groceries or gas should be a huge red flag. If there is no cash available and you are making up for that by using credit cards you make the situation worse. If you spend $100 on your minimum payment, but you need $100 in groceries, so you charge it to the card you just paid. Your total debt will go up because of interest.
2. You are Using One Credit Card to Pay off Another
   Using cash advances or balance transfers from one card to another is just a stalling tactic, and it does not make your debt go away. It instead increases your debt, and if it happens regularly, your debt will go up astronomically.
3. Your Interest Rates Have Increased Due to Missed Payments
   It is hard enough when you’re drowning in debt with reasonable interest rates, but, once you start missing payments many lenders, especially credit card companies, will jack up your interest rate to 30% or more. Once your rate is that high your payments will most likely pay off interest rather than the debt you incurred.
4. You Have Started Working More Than One Job
   Getting a second or even a third job to help with finances is always a good fall back. But, if your debt is already so vast that any extra work or hours you put in is not making a dent it might be time to consider more extreme measures, like bankruptcy.
5. Your Wages Are About to be Garnished
   If you have fallen behind on payments, a lender can get a court order to garnish your wages. A garnishment is where a creditor makes an arrangement with your bank or employer to take money directly out of your paycheck. If you have received notice that a creditor is attempting to garnish your wages, declaring bankruptcy will stop the garnishment proceedings.
6. Stress from Debt is Affecting Your Life
   If you are so overwhelmed by debt that it is keeping you up at night and affecting your work/personal life, it might be time to consider other options. Constantly being over stressed is not helping your financial situation.
7. You’ve Already Tried Alternative Methods
   If despite all your effort, you are not making a dent in your debt it may be time to file for bankruptcy.

Declaring bankruptcy is a huge financial step that requires a lot of thought. If a string of financial problems has left you drowning bankruptcy may be the right step to get you back on track. The bottom line is, do not hold off due to bad bankruptcy stigmas. Instead, get educated and time it correctly to get the most out of the bankruptcy process.
Written by: Rebecca Kidd