Bankruptcy is the worst nightmare of every person ever. Bankruptcy is a financial state where you’re left with no sources that you can use to pay off your loans. And that’s why everybody wants to stay away from this worst financial condition.
If you carefully keep an eye on your financial activities, you can easily stay safe from bankruptcy. We are going to discuss a few common signs in this article that indicate that a person is heading towards bankruptcy. So, if you want to stay safe from this situation, you must carefully read our article.
Signs that You are heading towards bankruptcy
There is nothing wrong with taking a loan from a creditor as long as you’re capable of paying it off promptly. But if you’ve gone beyond your limits while applying for a loan, you must be worried about paying it off because you don’t have enough resources available. Here are a few signs that may indicate that you are heading for bankruptcy.
Making minimum payments for your credit card
Every credit card billing statement contains a section called the minimum amount due. But if you’re not focused on settling the entire outstanding balance of your credit card on a monthly, you might be headings towards a lot of trouble and hardships. Many credit card holders pay only the minimum amount every month.
If you’re paying nothing but the minimum amount due on credit card, the interest on the remaining small amount will keep growing and the time will when it will take the place of the outstanding balance.
Taking out loans from your retirement account
You should not take out any amount from your retirement account as it is supposed to help you out when you’d get retired from your job due to old age. You can take out a small loan from your retirement account if you’re unable to repay the debts from your bank account. But we believe that it won’t help you get rid of the problem as you’d have to deposit money in your retirement account on a monthly basis.
Receiving calls from a debt collection agency
There are different third party agencies that are always ready to help the banks and other financial institutes if someone isn’t paying their money back. And they take every situation very seriously, and they do not make any compromises.
So, if you’ve started receiving calls from the debt collection agents, you must try to pay your loan back as soon as possible. The agent would initially gently remind you but if you didn’t repay the mean in the meantime, they’d start getting strict, and you’d start receiving sternly worded calls from them. This is how they force the lender to pay back the money to the creditor.
In some worst conditions, the creditor may take legal action against you. In this situation, the higher authorities will ask your employer to deduct some amount of your monthly income and send it as repayment.
When you’re surrounded by debts and can’t find a way out, the only thing you can do is to file for bankruptcy. But if you keep an eye on the signs we’ve mentioned above, you’d never get into any trouble. Make sure that you carefully resolve all the problems before the situation gets worse.
You can also take help from a lawyer to find the best solution if you’re trapped and can’t find a way out.