Risking bankruptcy
You risk being made bankrupt when you are living beyond you means and have no way of maintaining your lifestyle without relying on large amounts of credit. However, other unexpected and unfortunate life events can also lead to bankruptcy, including:
- Job loss
- Medical expenses
- Divorce
- Business failure.
All of the above are the main reasons why people in America begin filing for bankruptcy. However, that isn’t to say bankruptcy is inevitable should you lose your job or go through a divorce.
There are a number of simple, but important checks, which will allow you to gauge how prone you are to bankruptcy. If done in time, this checklist can allow you make the necessary changes in order to avoid bankruptcy – which is always the last resort. Consider the following:
- 1) Are you still paying installments for something you no longer own?
2) Do you struggle to meet minimum payments on credit cards?
3) Are you regularly missing payments on bills?
4) Have you met (or exceeded) your credit card limit?
5) Have you been refused credit recently?
6) Do you regularly borrow money to pay bills?
If one or two of these apply to you, it does not necessarily mean you are vulnerable to bankruptcy. Nor are you in danger of becoming insolvent if any of these apply to you irregularly, say once or twice a year.
However, if you can answer ‘yes’ to any of the question above, you ought to start making changes now to avoid consequences later. If answering yes to some of the questions shows you to be in serious trouble, then bankruptcy may be the best solution.
Debts have a comprehensive guide to bankruptcy, so visit our other pages to learn more. We also advise you to seek advice from an independent financial advisor before starting bankruptcy proceedings.
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