Although no one wants to go through bankruptcy, the process isn’t a life-ending situation. In fact, it could make your life a lot easier to manage as you no longer have to deal with creditors or make large payments each month. However, issues arise during a bankruptcy when a person waits too long to file. When is the right time to begin the process? Here are few of the things to look out for that may indicate whether bankruptcy is the best option on the table.
Falling credit score
One of the many reasons people refuse or take too long to file for personal bankruptcy is due to their credit score. They fear that if they begin the process, their score will go into free fall. However, reports state that most people already have a very damaged credit score by the time they file. In fact, their score actually begins to increase consistently after they have filed for bankruptcy because they can make payments on time again.
Unable to pay monthly payments
Bankruptcy may be the best option when you are unable to continue to make your monthly payments. Digging yourself into a bigger hole is a clear indication that you’ve run out of options and now have to think about the reality of filing for bankruptcy. It should also be noted that it is recommended to never dig into your savings or retirement account to pay your bills. Often, the funds within those accounts won’t be enough and may leave you without a proper retirement plan in the future.
Going through bankruptcy can be a frustrating and complex process without help. This is why it is so important to research and get guidance from an attorney who is experienced in bankruptcy law.