Debt can quickly become overwhelming. A few missed payments can soon turn into collection calls, late fees, lawsuits or the threat of losing your home.
If you feel like you are constantly trying to catch up and still feel like you’re drowning in debt, you may be wondering whether bankruptcy is the right solution. Bankruptcy isn’t the right choice for everyone, but here are some signs it could help.
1. You use credit cards for your living expenses
Using a credit card occasionally for an unexpected expense is one thing. Depending on credit cards to pay for groceries, utilities, gas or other necessities every month is another.
If you are having difficulty covering your regular expenses, adding more credit card debt may only be postponing the problem. High-interest, revolving balances can become increasingly difficult to pay down, especially if you can only afford the minimum payment.
2. You can only afford the minimum payments
Minimum payments help keep an account current, but do little else to reduce the underlying balance when interest continues to accumulate. If you have been making payments for months or years without making meaningful progress on your debt, it may be time to take a broader look at your financial picture.
3. Your wages are being garnished
A wage garnishment can make an already difficult financial situation even worse. If a creditor has obtained a judgment against you and is taking money directly from your paycheck, you may struggle to keep up with essential expenses. Filing bankruptcy can trigger an automatic stay that stops most collection actions.
4. Your medical bills have become unmanageable
A serious illness, injury or medical emergency can create substantial debt even when you have health insurance. With deductibles and co-pays, medical bills can become impossible to manage alongside your other expenses. Bankruptcy may provide relief by discharging certain medical debts.
5. You have experienced a major financial setback
Sometimes overwhelming debt comes from circumstances beyond your control. A job loss, divorce, major medical event, business failure or unexpected family expenses can quickly change your ability to pay bills. Relying on credit is not a sustainable solution. Bankruptcy may be worth considering as part of a financial reset.
You may feel as if you need to fix your financial problems on your own. That’s not true. A legal professional can review your financial situation, explain your options and Georgia’s exemption laws and help you determine the best course of action for your circumstances.