Warning Signs of Bankruptcy

Credit and financial problems is an ever growing problem in today’s society. With how expensive things are, what with a house, car, insurance, gas, children, food, supplies, bills, repairs and other non-planned expenses, things can get really tough financially for families. Sometimes people cannot support their own lifestyle and either have to live through lower means or declare bankruptcy as a last resort.

There are warning signs out there that may give you a heads up as to if you are heading in that particular direction. When you see the warning signs becoming a true factor in your life, then later on in this article I will touch on some ways you can weave your way out of it and prevent future occurrences to better protect yourself as well as your family from financial distress. The warning signs of bankruptcy are as follows:

1. Using your credit card for day to day expenses
2. Paying off credit cards with other credit cards
3. Having no health or Life insurance
4. Co-signing for a loan or a mortgage (Hazard if your co-signatory fails to make payments)
5. Taking out a second mortgage or line of credit
6. Making only the bare minimum monthly payment on credit cards
7. Reliance on a second job or overtime just to make ends meet
8. Consistent borrowing of money from friends and family
9. Not answering the phone in fear of a bill collector or pretending not to be home
10. Frequent patronization of cash advance stores to pay for bills
11. No other savings or emergency funds
12. Bouncing Cheques
13. Lying about your financial situation
14. Purposely hiding credit bills from family
15. Refusing to talk about your financial situation with others
16. Financial trouble creating problems in family life

As you can see there are many potential warning signs of bankruptcy becoming factors in people’s lives. If more 3 or more of the above sound a little too familiar then you might want to consider making some financial changes before things get out of hand. Luckily there are simple easy tasks and switches that you can do to divert yourself away from the mess and nightmare that bankruptcy creates. Consider the following:

1. Re-assess your financial situation and decide what you want to accomplish
3. Seek financial counseling or advice from people who have prove successful
3. Create a spending limit to deter impulse spending
4. know your means of living and don’t go beyond those means
5. Create a monthly budget (this helps you keep track of where your money is going and what unnecessary expenses you have)
6. Have a second bank account to store emergency funds
7. If funds permit, take out an investment at the bank. Investments usually carry a 12% return on contributions
8. After all expenses divide the money left by 3 (33.4% – EMS funds / 33.4% – investments / 33.4% to yourself for spending)- adjust percentages to suit your lifestyle.
9. Prioritize your financial obligations