When to File Personal Bankruptcy

At times, people fail to keep track of their finances, avoid adhering to a budget, or are unprepared for an unexpected expense, such as a large medical bill. Consequently, they reach a point where they can no longer fulfill their financial obligations and have to consider filing for bankruptcy. The term is often viewed as an indication that those who go through personal bankruptcy are inept at managing their finances and poor credit risks as well. However, realistically speaking, some who take this step are industrious and honest but have never learned to budget wisely.

Signs that bankruptcy is imminent

At first, people who are facing personal bankruptcy may approach it apathetically or passively, which is a form of denial. Consequently, they avoid or ignore phone calls from their creditors, fail to respond to the urgent notices they receive in the mail, and delay paying their creditors. They may also pretend that there is no problem because of what they feel others might think of them if their financial situation becomes known.

People who reach this stage tend to “max out” their credit cards and incur overdrafts as well. However, while large credit balances are acceptable, they should not be carried as a temporary solution to a long-term financial problem, the inability to pay off creditors. When this situation persists, a wise consumer will consult a professional who is experienced in dealing with personal bankruptcy cases.

The most obvious indication that personal bankruptcy is imminent is when a person reaches the point of hiding bank statements from a spouse or partner, as if the problem will be solved in some miraculous way. In addition, other family members can be harmed by this tactic, and it can have a serious negative effect on their relationships as well.

Obtaining legal assistance

There is no doubt that serious financial problems in a family are a breeding ground for lack of trust and fear, which can increase exponentially when drastic steps are taken, as when a bank freezes a customer’s account. Fortunately, the situation will never reach this stage if people consult a bankruptcy professional who can help them find plausible solutions that may even make it possible for them to avoid declaring bankruptcy.


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