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Signs that it is time to consider bankruptcy

Filing for bankruptcy may be the last thing you want to do. You might feel like doing so makes you a failure or that it is the same as giving up. Instead, look at bankruptcy as a tool to help you get control of your debt. Many people find themselves in similar circumstances where their debt outweighs their income due to a loss of income, unexpected medical costs and various other reasons.

If you are overwhelmed by debt, it may be time to truly consider the option of filing for bankruptcy. Read below for indicators that you should take your first step toward regaining control of your finances.

A lot of debt but no income

Some people, especially senior citizens, find themselves in a position where they have little to no income, but mounting debt. This is often due to the loss of pensions, decreasing retirement funds and increased medical expenses.

Unpaid medical bills

If you cannot pay your medical expenses, it might be time to file for bankruptcy. Even with health insurance, many people find themselves with high deductibles, co-pays, and specialized treatments that their health insurance denies coverage for. With the constantly rising cost of health care, it does not take much to end up with medical expenses that your income cannot keep up with.

Overwhelming credit card debt

If you find yourself only able to make the minimum payments on your credit cards or using them to purchase certain basic items on a regular basis, it might be time to take a realistic look at your finances and consider filing for bankruptcy. Take stock of your financial situation, including all of your assets and debt. If your debt level exceeds the value of your combined assets, bankruptcy could be the best solution for you to get things back on track.

You're divorced

If you are divorced and you and your ex still have joint debt, you could be on the hook for the entire amount if he declares bankruptcy. If you are having issues managing your own debt, the last thing you need is to take on your ex's share as well. If he declares bankruptcy, it might be a wise move for you to do so as well if you meet the requirements.

Out of work

If you are unemployed and your financial resources are running low, bankruptcy might be able to help you keep your head above water while you continue your job search. However, filing for bankruptcy can further damage your credit, so if a credit screening is part of the hiring process, it might cause a problem with a potential employer.

If you are facing unmanageable debt, it might be time to seriously consider filing for bankruptcy. By successfully completing the process, you can get your finances in order while taking care of your obligations.

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