Not having a penny in the pocket and dealing with the overwhelming burden of debt is the worst nightmare for any individual. This is the phase that can destroy your finance and will pull you far away from that so-called stability. But the reality is that many people have gone bankrupt because of their careless attitude towards money and lack of financial knowledge.
Bankruptcy is not always an overnight tragedy. It occurs in stages to people all every financial group. Thus, it becomes necessary to watch over your financial activities, and if you think that you are losing the grip over your money, you should take serious actions.
The financial consequences of bankruptcies
The moment you file for bankruptcy, it starts taking a heavy toll on your finance and has a severe impact. Here are the consequences that you might face after bankruptcy:
- Long term effect: The worst thing about bankruptcy is that it has a long term effect. The stain will remain on your credit report for a long time which will make it difficult for you to acquire any financial product in the future.
- Loss of property: All the property and assets that you acquired during bankruptcy will be ceased. The only things that the bankrupt will be allowed to keep are their personal belongings such as clothes, books, vehicles, etc.
- Difficulty in borrowing: Once the person has filed bankruptcy, buying any financial product will become challenging. Most lenders and companies will reject your application after seeing the bankruptcy spot on the credit report.
- Higher chances of unemployment: Even though it is not illegal for the bankrupt person to do a job, still, there is a high chance that the employer might not be interested in keeping you as the employee in the company.
Telltale Signs that you might face bankruptcy soon
Here, in this blog, we have mentioned significant signs that are the clear cut indications you are facing towards bankruptcy. So, let us get started.
|Missing out the payment|
The first and a strong sign of bankruptcy is when you are missing out the payments. This indicates that you are financially incapable of keeping up your bills, loan, rent, mortgage, medical bills, credit card payments, and other forms of debts.
The person struggling financially might opt for the option of the minimum payment. However, if you are unable to afford that, then you no longer are stable. Lots of debt due can even result in legal action taken against you, such as county court judgement. To get over it, you will have to search perhaps a lender who can provide a loan with CCJ on bad credit to make the payment of the remaining debt.
|Financial worries are giving you sleepless night|
Your savings have been exhausted in handling the financial problems that you are facing now and then. And, you are barely able to sleep peacefully at night because of the money stress, then this could be another great sign that it’s time to file for bankruptcy.
Now, there can be various factors behind the financial worry that you are encountering such as:
- Job loss
- Great amount of debt
- Consistent pursuit of the creditors
- Unable to even manage the necessary expenses
|You are letting go of the necessities to make the payment|
Well, not buying new clothes every month or a new laptop or Smartphone every six months is not a significant problem. But, if your financial condition has hit a low point where you have to sacrifice even necessities, then this is an indication of a bigger problem. Skipping the essentials such as:
- Health insurance
- Vehicle repair
- Child education expenses
All these can create a heavy downfall into your living standard. Thus, it is better to take serious steps to deal with the problem.
|You have exhausted the credit card’s limit|
Another great sign of bankruptcy is when your credit cards get maxed frequently. This is the indication that you are unable to manage your essential expenses such as food, clothing and others. After that, you are increasing or finding new lines of credit will become too difficult for you. It means that the only option in front of you is to resort to bankruptcy.
|You haven’t recovered from a significant loss yet|
At times, we all face a situation in life that devastates our finance ultimately. But, if the effect is prolonged and you are still not recovered, then this might suggest that you could face bankruptcy sooner or later.
So, these were the primary indications that you could face bankruptcy and you need to take serious step to avoid it. The earlier you will spot, the higher will be the chances to get over it and you might not have to file for it.