4 Signs That It's Time to File Bankruptcy

Nobody sets out to get in over their head financially. Unfortunately, it’s one of those things that can happen. People spend their credit to purchase homes or cars, to finance their education, or even to take a well-deserved vacation.

Then, the unthinkable happens. They lose a well-paying job, a “sure thing” investment tanks, or they contract an illness that renders them unable to work any longer. From there, the financial situation declines rapidly.

Bankruptcy is not necessarily the consequence of foolish spending behavior. Sometimes, it is the result of those unexpected circumstances that life throws our way.

And, it doesn’t happen only to low- to middle-income families or those labeled “deadbeats.” In fact, some lofty people have had to use bankruptcy to wipe the slate clean and start over again.

Here are just three of the best-known individuals who have invoked bankruptcy only to rise back to prosperity:

• President Donald Trump’s companies (note: not Pres. Trump personally) have filed for bankruptcy six times as the changing economics in the town on Atlantic City, New Jersey impacted the casino and hotel industry.
• Disney Co. founder Walt Disney was conned by a vendor in 1923, rendering his first film studio penniless. He re-formed a few years later, created a lovable mouse, and skyrocketed to fame.
• Iconic American writer Mark Twain made a small fortune in his day. However, when his publishing house failed to pay him the royalties on his sales, it left him crunched for cash. He filed for personal bankruptcy as a consequence.

These are three different businesspeople from three eras, with one thing in common. They used bankruptcy to seek relief from business or personal debt so they could begin anew.

Deadbeats? I think not.

If you think you might be headed for bankruptcy, here are some signs that it’s time to seek that same relief.

You’re overwhelmed with debt collection calls

Debt collection calls are more than a nuisance. They start out with friendly “reminder” or “courtesy” calls and escalate to persistent waves of phone calls that take an ominous tone. Block the calls, and they call your ex-spouse, your parents, or even your place of employment.

Debt collectors are notorious for throwing out the rule book and pestering you until you lose your mind.

Worse yet, they continue to call until you finally agree to make a payment arrangement—which you well know you can’t afford to meet.

If you have considered disconnecting your phone to avoid these nagging calls, you might be headed to bankruptcy.

You receive lawsuit notices

Are your creditors sending you certified letters? If they are, read the communications carefully—they are probably covering all bases before they sue you.

Fighting a debt collector and winning without legal representation will almost certainly yield a negative outcome. You had better believe that the debt collection companies have lawyered up and meticulously collected their records.

If you cannot afford to pay off this debt, you obviously can’t afford a lawyer. The outcome will most likely be a collection judgment for the next 7 to 10 years.

You’re facing wage garnishments

Just because you lost that debt lawsuit but don’t have the money to pay it, that doesn’t mean you can skip on the debt.  Your creditors can petition the court to order a wage garnishment. This order notifies your employer. In turn, a certain portion of your paycheck will be withheld each week until you repay the amount listed in the judgment.

Garnishments stifle you, taking you out of control of your money.

Your landlord or mortgage lender is evicting you

Perhaps the most compelling sign you should consider bankruptcy proceedings is an eviction notice of your premises. Whether you’re behind on the rent or mortgage payments, you are facing the frightening possibility of homelessness.

Not only can an eviction leave you homeless within weeks, but it can also impede your credibility as you begin to seek a new place to live.

How Bankruptcy Can Help You Immediately

If these signs sound too familiar, you need help from a bankruptcy attorney. According to Rick Abelmann of Abelmann Peterson, LLLC, “bankruptcy is a fresh start.” Once you hire a bankruptcy lawyer, you will have an advocate on your behalf.

In addition, once the lawyer files the bankruptcy, you are immediately protected by an “automatic stay” which gives you relief from the collections tactics including eviction. The automatic stay gives you and your attorney the time you will need to sort out your case.

There’s an old saying about bad things happening to good people. If this sounds like you, and you’re experiencing the four signs of impending financial doom, seek an attorney’s advice before it’s too late.

Abelmann Peterson, LLLC
677 Ala Moana Blvd, #1009
Honolulu, HI 96813
(808) 589-1010