Knowing when to file bankruptcy isn’t an easy choice. Most people wait too long.

In the current economy, good timing is going to be everything. Filing bankruptcy fast enough could be the difference between navigating an uncertain time successfully and ultimately losing everything. 

Knowing these 9 signs can help you plan your next move.

#1) You’ve run out of savings.

Most people in America don’t even have $400 of savings. Less than 69% have even $1000 in savings.

Saving is hard when you live paycheck to paycheck. Yet if you can’t set anything aside and you’re burdened by a bunch of other debts, then you might still want to consider it. 

#2) Your financial situation is unlikely to improve within the next year.

This is tricky, especially during the Covid-19 era. People’s fortunes are rising and falling very rapidly right now. Some people will get their jobs back. Others won’t.

You’ve got to do your best to create a realistic expectation for how the next six months or so will treat you and your family. Are you in an industry that’s bouncing back? You might be okay. Did you work for the airline industry? You might have a long road to recovery.

#3) You’re using debt to pay debt.

You can only use the “move money around” trick for so long before it stops helping. If you’re using credit cards to pay off other debts or are taking out debt consolidation loans then you’re probably in enough financial trouble to start considering bankruptcy.

Rest assured that credit card companies aren’t fooled. You might see a sharp incline in your interest rates if you keep robbing Peter to pay Paul. This increase is in itself a sign: credit card companies are often more aware of trouble than their customers are.

#4) You have accounts in collections.

Bills in collections mean a few things. First, your credit score is plummeting. Second, people are calling you at all hours of the day and night, stressing you out. Third, you’re vulnerable to lawsuits which could ultimately lead to the loss of important assets.

Even one account in collection could be a sign that your financial situation has become completely untenable. 

#5) You’re worried about repossessions.

Either a car repo or a house repo can completely disrupt your life to the point of throwing it into a tailspin. Finding new housing can be a challenge and financing a car after a repossession can become next to impossible.

Bankruptcy can protect you from both types of repossession, but only if you move fast enough. 

#6) You’re maxed out and missing payments.

Once you’re maxed out and defaulting on loans it’s very difficult to catch up again. This can also result in seeing more accounts sent to collections. 

#7) The stress is driving you crazy.

Debt can have a significant impact on your physical and mental health. This is a time when protecting both types of health is especially important.

If you’re overwhelmed to the point where you are starting to lose your health over your financial situation, then it’s probably time to call a bankruptcy attorney. There is a light at the end of this tunnel…one that will leave you better off in the long run.

See also:

Will Your Life Be Better During Bankruptcy?

How to Respond to an Orange County, NY Debt Lawsuit

4 Ways Your Life Will Improve After Your New York Bankruptcy