How do I know if my finances are out of control?

Consider bankruptcy in free consultation with Kevin J. Rank, Salem, Oregon

I know I’m in financial trouble, but should I be considering bankruptcy?

Bankruptcy is serious, and it shouldn’t be taken lightly. But sometimes when you’re in the midst of financial stress and overwhelmed by bills and creditors it’s tough to see exactly how deeply mired you really are. Here in Oregon we really understand the phrase,  “Can’t see the forest for the trees!”

Some of our potential clients really think they can work themselves out of a tough situation alone, and while we admire their work ethic, in some cases it’s simply not true.  We want to help you look at the big picture so you can really evaluate if legal intervention (bankruptcy) is right for you or your family.

Here’s a list of questions you should ask yourself when considering bankruptcy. Many people struggle with some of these issues. However, if you answer yes to more than two of these questions, you should definitely call us for a free consultation.

You should consider bankruptcy if you’re struggling with at least two of the following:

Have you taken a second job in order to pay your bills?

In this economy, we know many people need to take on two jobs. But if your regular earnings used to do the job, but now you’re looking for more work and taking on extra shifts just to cover basics, here’s your first red flag. If your debts are mounting faster than your extra hours of work, you know there’s a problem.

Do you use credit cards to pay for basic needs?

If you’re working hard and earning, but still have a tough time paying for groceries each month you may need to come see us. Are you putting things like diapers or utilities on your credit card? Paying for basics like food or rent shouldn’t be something that doesn’t fit in your regular monthly budget. Putting necessities on a credit card means you’re in trouble.

Are you only making minimum payments on your credit cards?

If you’re only making minimum payments on your cards you’re paying very little in principal, which means it will take you years to pay them off. So even though you feel like you’re working your tail off to make payments, you’re actually not making any financial headway. This hopeless cycle is a sign that you should at least be considering bankruptcy.

Are you opening new credit cards or taking cash advances to pay off other cards?

There’s an old phrase for this kind of spending. It’s called robbing Peter to pay Paul. If you can’t keep up with your current payments and you’re opening new lines of credit in order to pay for previous debts or even for necessities, you’re in very serious financial trouble. Using new debt to satisfy old debt just digs you into a much deeper interest hole.

Do you keep running into late fees?

Are you trying so hard to juggle your financial obligations that you’re missing deadlines and looking up which utility charges less in late fees? Are you racking up late fees on your credit cards, loans or utilities? If you’re resigned to late fees and interest charges it’s time for a change. These should not be regular occurrences in your life.

Have your utilities been shut off for failure to pay on time in the past year?

If you’re getting so behind on utility bills that a utility company has turned off your power, water or heat at some point this year, you probably know you’re struggling. Often utility companies will then charge you not only a late fee, but a fee to reconnect. These charges pile up quickly and if this is happening to your family you may need to seek help.

If you set aside your student loans, car loan and mortgage, would you be able to pay off your other debts in 12 months or less?

Because everyone has different income levels and different debts, this is a really good metric for determining how your finances are really doing. You may have tons of debt, but also a great income and great possibilities for your future. Or you may have very little debt, but still have no hope for financial freedom. There are some things like mortgages, car loans and student loans that we expect to take years to pay off. Any other debt you have, like credit card debt, is collecting interest quickly and gets out of hand before you know it. If you don’t see a way to pay down your debts in a short period of time (think 12 months), you may need to consider your alternatives.

Do you know how much debt you have?

This is a big indicator for us, and it should be for you too. If you don’t know how much debt you actually have, if you’re been ignoring some debts hoping they go away or if you are so overwhelmed you can’t even bear to add it all up you need to call us. Your finances are officially out of control, and you need to ask for help.

Considering bankruptcy may be frightening, but calling us will be a huge relief.

Taking an honest look at your finances with these questions in mind may be tough. We see you! We’re here to let you know you’re not alone, and we promise not to let you file bankruptcy without examining all your options first. That’s why we offer a free consultation. Call today.

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