This is a question I answer on a weekly basis and usually, by those hoping to avoid filing bankruptcy, even though the fact they are in my lower office, they may already know the answer. Here we will explore three situations, which if you’re living in any of them, highly suggest that filing for bankruptcy is in your very near future.
You can only make minimum payments on your credit cards. Once you have reached the point that you have maxed out your credit and reached a financial point where after paying all your bills, you can only make the minimum payments on your credit cards, you are most certainly ready to file for bankruptcy. Most people do not realize that if you’re using credit, and are not able to pay one third or 1/3 of your balance every month, and you are already overusing credit. Eventually, this will lead to only being able to cover the monthly minimum and that’s when you know the writings on the wall. The problem with this situation is it does not account for any of the problems that life throws at all of us. At this point, if a major repair is needed on your automobile or your home or any kind of unexpected expense hit your life, that situation will force anyone who is paying the minimum of their credit cards to file for bankruptcy. So if you’re already doing this, you may as well save yourself a lot of time and headaches and simply file for bankruptcy now.
Use of one credit source to pay for another. Otherwise known as stealing from Peter to pay Paul, once you are paying off one credit card with another you know you’re in trouble. The only situation where this is acceptable is when you receive a check for 0% transfer in 0% APR for six months or more, it’ll always be a bad situation to transfer credit from one source to another. When you’ve reached the point that you’re already doing this, you have gone past being able to make your monthly minimum credit card payments and are trying anything to keep your head above water.
Taking money out of your 401(k), IRA, mutual funds or any other retirement based financial asset, you are already on your way to bankruptcy. People need to file bankruptcy before they start touching their retirement funds, for the simple reason that bankruptcy will not touch those funds. So the things you thought you needed to pay off, most of them or all of them will be able to be wiped out and bankruptcy. So the money you withdraw from your retirement savings is money you are simply throwing out the window. When to start dipping into your life saving so to say, you know you’re at the point where you must file for bankruptcy.
Joseph F. Botelho, Esq.
BOTELHO LAW GROUP
Attorneys At Law
901 Eastern Ave.
Fall River, MA 02723