What are some of the Warning Signs that Could Lead to Bankruptcy?

This is not a complete list however the following are warning signs that could lead toward bankruptcy. If one or more of the following apply to your situation you may want to consider consulting a bankruptcy attorney.

Warning Sign #1: You Consistently Spend More Than You Earn

This is one of the main reasons because it is the most frequent warning sign that could lead to bankruptcy filing. Many people have to file bankruptcy because they do not manage their money in any real way. Often people use their debit card and spend their weekly pay check and never accumulate any savings. When an emergency arises such as a medical bill, car repair, house repair, etc. they do not have the money to pay for it.

It is good to set up a budget an make sure you stick to it. Make sure there is money set aside each week in a savings account so if an emergency arises you are not put in a dire emergency.

Warning Sign #2: You Rely On Credit Cards For Emergencies

It is important to have an emergency fund set aside for the unexpected. An unexpected car repair can disrupt your life. If you do not have the funds set aside and have to use credit you will find yourself paying for that repair for many months to come. Also you will be paying much more than the initial cost of the repair because of the high interest rates. Now you have an additional monthly payment which means less money for your regular expenses and you may find yourself in the downward spiral of using credit to make ends meet. It is very easy for the “domino effect” to start if another major unexpected expense comes up before the first was paid for.

Warning Sign #3: You Put Off House Repairs or Car Repairs or Buying Necessary Clothing or Necessary Medical Care Due to Lack of Money

If you find yourself having to put off expenses such as house repairs, car repairs, medical treatment, dental treatment, medicine, therapy or something that you need but just cannot afford at the moment you may be heading for financial trouble.

Not only does it cause financial trouble but putting off a necessary expense tends to make the problem worse and worse and something that could have been resolved for $500.00 will now cost much, much more and cause more damage in the end. You may be forced into a situation where you must use credit now and the downward spiral begins.

Warning Sign #4: You Have No Extra Money to Have Fun With

Let’s face it. It is no fun working if you cannot enjoy yourself now and then. However, if you find yourself in the trap of paycheck paying bills and credit cards being used for living expenses you will not have any discretionary money to enjoy yourself once in a while. Again, you may find yourself using credit for the times when you want to have a little fun however it just makes yours situation worse and worse and can lead to depression or feeling like you did not enjoy the time off because you know you will be paying for it over the weeks and months to come.

Warning Sign #5: You Feel Worried, Anxiety or Stressed About Money

It is no secret that financial distress clearly causes mental and health problems. If you’re always thinking or concerned about these warning signs that could lead to bankruptcy, it’s not too late and you should consult with a bankruptcy lawyer. Filing bankruptcy will get all or most of your debts discharged and you can begin your fresh financial start in life.