Millions of Americans each year find themselves in over their heads when it comes to credit. They have too much debt, and with no way to repay it, find themselves looking to bankruptcy as a solution.
If you are unsure whether you might be heading toward bankruptcy, there are some warning signs.
- If you have no health insurance or have inadequate coverage, you could be headed toward bankruptcy. One major health issue, and your medical bills could push you over the edge.
- You have maxed out your credit cards. You should use no more than 30 to 40 percent of your available credit at any one time. If you’re above that, you’re in trouble.
- If you are using your home equity loan or line of credit for things other than those related to your home, you may be in trouble.
- Living from paycheck to paycheck is never good, and if you are doing so, you could be at high risk for bankruptcy.
- You only pay the minimum balance due on your credit card bill each month.
- If you have a tax lien or foreclosure on your home, or your car or other property is repossessed because you can’t pay, you’ve lost your grip on your financial situation.
If you have lost your grip on your financial situation, you may be headed toward bankruptcy. But you can regain your grip and get back on track by following these tips.
- Don’t spend impulsively. If you have a problem with this, curb your spending by planning ahead. Don’t go to the mall. Eat at home, rather than eating out. If there are sales going on at your favorite stores, don’t go to those stores.
- Don’t use a credit card unless you have the cash to pay it off. And make it a habit to pay your cards off each month.
- Shred pre-approved credit card offers – don’t apply for new cards.
- Set a budget and stick to it, beginning as soon as possible.
- Only buy or rent the size home you need.
- Make sure you have enough medical, homeowners and auto insurance.
- Don’t make high-risk investments.
- Don’t co-sign for someone who has debt problems, or work with others who have questionable financial habits.
You can get back on track and avoid bankruptcy. Just take an honest look at where you are financially, make a plan, and then stick to your plan.