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The Warning Signs that Bankruptcy is a “Must”

Many New Jersey-ites are up to their eyeballs in deep in debt. They don’t see the warning signs of their impending financial disaster  until it’s too late. Meanwhile, many people still will do will do anything to avoid filing for bankruptcy, only to ultimately learn that they should have filed years ago. After many debtors file, most regret that they did not file years ago. If they had would have filed earlier then they would not have to deal with so much financial stress for such a long time. I have helped almost two thousand New Jersey-ites wipe out, reduce, and reorganize their financial mess through the bankruptcy process. Many debtors who desperately need debt relief are often often in denial. Many debtors hopefully believe that better days are ahead for them. Good luck in this economy! Times have not been this bad since the 70’s. Some debtors believe that they will get better jobs, come into some money, or win the lottery. These debtors hope this “never coming” windfall will enable them to pay off their debts. If you have massive debt problems, or if you are experiencing any ollowing warning signs, then you may want to file for bankruptcy. Don’t ignore these bankruptcy warning signs. If you have overwhelming debt, and if following warning signs apply to your life then make an appointment immediately.

1. You have stacks of unopened bills.

Many debtors with mounting or overwhelming consumer debt simply don’t open their mail. They literally let their bills pile up into a small mountain. Credit card companies, the collection agencies, and the medical bill collectors will then send a debtor various notices when you are past due or delinquent. These bills can be seen through a windowed envelope. Moreover, the envelopes change to nastier colors as time passes on. The envelopes start off being white, then yellow, orange to red. If you are familiar with receiving a rainbow of different color envelopes on a daily basis, and if you don’t open up your mail, then you are headed for a financial disaster. If you have stacks of unopened mail and are scared of opening it, then you should consider filing for bankruptcy.

2. You are not sure as to how much money you owe to your creditors.

If your debts can’t be determined within a few thousand dollars then you may have more financial problems than you believe. Many debtor people don’t know how much money they even owe to their creditors. I have many clients that have no clue as to whom they owe money to. Thereafter, I have to order their credit report because this is the only way that I can ascertain their financial picture. Moreover, consumer debt is often transferred several times to different collection agencies. Moreover, there are many companies that buy consumer debt.  By the time many debtors are sued, their debt is sold three or four times. These companies buy the debt at a discount. If the new company can collect on the debt, then they can make a nice profit at your expense. What blood money!

Moreover, in many marriages some spouses are not fully aware of the magnitude of their partner’s debts. There are many married couples that don’t know the extent of their spouse’s outstanding consumer debt.  If you do not communicate with each other during the marriage, then financial problems can ruin a marriage. If you find that you are arguing with your spouse over unpaid credit card bills that you did not even know existed, then this is another warning sign that bankruptcy may be for you.

3. You borrow from one creditor to pay another one.

You have probably heard the old slogan “Robbing Peter to Pay Paul.” If you are borrowing from one credit card to pay off  another one, or if you have been getting a cash advance from one credit card to pay off another credit card, then you may be an excellent candidate for bankruptcy. No matter what your situation is, it is never advisable to rack up additional credit card debt, to pay off your old credit card debt. This is a recipe for a financial disaster! The cycle of borrowing from one credit card to pay off an old credit card debt is a sure fire sign of financial disaster.

The credit companies make it very easy to play the credit card “switch-a-roo” game.  The credit card companies make it very easy for a consumer to transfer balances, get cash advances, or use credit card checks that seem like cash. In many instances the average person does not even feel like he is spending any money be getting a cash advances or by using one of the credit card checks. The ordinary person often feels that he is using free money. However, the cold hard reality is that this person by using this type of credit is essentially just digging his own financial grave. Cash advances, credit card balance transfers, and the use of credit card checks routinely charge upwards of 25% of interest or more. If you are forced to ultimately file for bankruptcy, then these same credit card companies who once talked you into transfering these balances, may cry fraud or try to file adversary case against you. The credit card company will argue to the court that you never intended to pay their debt since you were insolvent, and you had no money when you made the charges. Basically, these same credit cards may try to block the discharge of their consumer debt if you have forced to file for bankruptcy. In summary, if you are borrowing from one creditor to pay another, then this is a classic sign that you may want to consider filing for bankruptcy.

4. You are being sued for a debt and/or have a pending lawsuit filed against you.

If you have received a lawsuit from a credit card company, or if you have been sued by any one of your creditors, then bankruptcy may be right for you. It takes a sizable amount of effort for a credit card company, or any creditor to file a lawsuit against you. There is a lot of paperwork involved, you have to organize all of your bills and correspondences, finally you also have to pay filing fees.  Since lawsuits also cost money to file and pursue, that means that the creditor believes there they can collect, and they have given up on trying to resolve the debt in a reasonable manner.

Once you have been sued, then it becomes a matter of a public record. Thus, once you are sued, then it appears on your credit report, and your credit score will likewise plummet. Most debtors will not be able to obtain new credit if they are contesting collection lawsuits. Most of the credit cards companies share information with each other about consumers. If you are being sued by a credit card company, then the other major credit card companies will also be aware of this legal even. The major credit cards will often cut off your available credit once you are being sued by another credit card company. The worst part of a lawsuit is if and when the creditor obtains a judgment against you. If a creditor obtains a judgment, then it can garnish your wages, file a lien on your home, seize your bank account, or even try to seize your car if it does not have any liens on it.

In summary, If you have a lawsuit pending against you, then you might want to seriously consider filing for bankruptcy. A bankruptcy will immediately stop the lawsuit, and to prevent the creditor who is suing you from ever obtaining a judgment.

5. If you’re behind on the mortgage or have car payments, and you can’t convince the creditor to accept a partial payment.

Many people who owe money or have debts of any kind have probably fallen behind or gone past the actual due date at least more than once. Many creditors, especially secured creditors such as your mortgage lender or car loan company can sometimes be reasonable to deal with. Many secured creditors will provide you with a plan to enable you to repay your missed payments. The also have programs to allow you defer your regular payment, or may allow you make a partial payment. If you are consistently missing your payments, or you have fallen so far behind, and if a creditor won’t even accept a partial payment, then it’s very likely that your creditors will be filing either a  foreclosure, repossession, or lawsuit against you. Moreover, if your creditors are not willing to even accept a partial payment then bankruptcy is a must.

6. You are afraid to answer your phone because you fear that it is a collection call(s).

The most frequent complaint that I receive from my bankruptcy clients is that they are “driven to drink” because of receiving endless collection calls. My clients advise me that they receive calls from debt collectors all morning, noon and night. Once a debtor retains my services then I advise the client to inform the creditor to call my officer. Thereafter, I will advise the creditor that the debtor is filing for bankruptcy. I receive collection calls on behalf of my clients. The collection calls never end. The debt collectors also use recorded messages so they don’t have to spend any money paying a debtor collector to repeatedly call you. Quite often, debt collectors are from India and they call you around the clock. These debt collectors try all types of tactics to harass you to make you pay your bills. Some try to scare you and threaten you with being arrested. Meanwhile, some debt collectors try to become your friend, and they try to make you feel guilty when you are not paying your bills. Whatever the case may be, receiving endless collection calls a day certainly reduces the quality of your life, increases marital discord, and stresses you out to the max.

If you shake every time the phone rings, or you let all unknown calls go to the voice mail, then it is time to file for bankruptcy.  You should not have to live in fear of your telephone. Most debtors don’t want to answer their phone because they are scared of the debt collectors. However, this will not stop the debt collector. Most debt collectors will let the phone ring until someone answers the phone. They can be utterly ruthless. No one wants to deal with an obnoxious bill collector. For the most part debt collectors are rude and and nasty. They call you nonstop all throughout the day and night can make people apprehensive to answer their phone. The best tactic for a debt collector is to call you at work. When you sign a credit card application, quite often you list your phone number for work. The debt collectors love to call you at work. This “amps” up the pressure on you to pay your bill. Most debt collectors are fully aware that you don’t want to be embarrassed by receiving collection calls at work. Many of my clients bemoan to me the embarrassment of receiving collection calls at work. Most debt collectors won’t stop calling you at work until you pay off the debt or if you file for bankruptcy. If this sounds like your own life, then bankruptcy certainly can improve your life. Wouldn’t it be nice to be able to answer your phone again and not have to worry that it is one of your debt collectors?

7. You kite checks, write bad checks, or write checks and don’t know whether they will clear or not.

If you write a bad check then you are committing a crime. If you write a  bad check and you know that there are no funds available to pay it, then it is considered a crime. You should not permit creditors and bill collectors to brand you as a criminal. When you write a check to a creditor and you know that there is no money in your account, but hope that the money will be there at some point it, then this can become a very dicey situation. If you write bad checks then your financial predicament will only become even worse. Even when creditors talk you into or scare you into using post-dated a checks, they can process them earlier to your detriment. Payday loan companies and others prey on those in need, and may invite you to post date a check for a higher amount in order to get more money from you. You should not let this happen to you.

Therefore, when you send out a credit card payment in the mail but have no money in your checking account, and yet hope the check won’t hit the bank buy the time you put money in the account, that is called “kiting.” Kiting is illegal and you shouldn’t let bill collectors make a criminal out of you. If your debt has gotten out of hand, and you are kiting checks, you should consider filing for bankruptcy.

8. The IRS is garnishing your paycheck and/or it has levied your bank account.

If you owe the IRS money for any back taxes and if are now being garnished, have a tax lien, or your bank account has a  tax levy on it, then you probably have some type of debt problems. A bankruptcy can even stops an IRS garnishment. Bankruptcy can also even wipe out many types of income taxes, or allow back taxes to be repaid over time. Bankruptcy and taxes can be a complicated subject. However, whatever the particular scenario, you might want to consider filing for bankruptcy because an IRS wage garnishment or an IRS levy is a sign of serious financial trouble.

9. Your creditors are calling your friends, relatives, and neighbors.

Creditors will go to great lengths to get you to pay their debt. When you stop taking their rude and never-ending phone calls, they may “amp”  their collection tactics. Most debt collectors will try to embarrass you into paying your debt.  If a creditor can’t reach you at home or your work, then they may have the authority to contact your friends, relatives or anyone else you may have put down on the initial credit application. When you signed the credit card application there was probably a question which asked for a name, address, and telephone number of a relative not living with you. Most likely, it also asked for the same contact info for some friends or neighbors. If a neighbor, friend, or relative is passing on messages to you from your creditors, it can be sign that you might want to consider filing for bankruptcy.

It is extremely embarrassing to have friends, relatives, and neighbors know that you are drowning in credit card debt and that you can’t pay your bills. Despite these “cut throat” collection techniques of calling friends or relatives, it is usually legal for these creditors to do so. When creditors are hunting you down, and Aunt Mary, your best friend, your employer, or your next door neighbor has collection messages for you, it is an obvious a sign that you must file for bankruptcy.

10. You use your credit cards to pay for everything your trips, 7-11, the movies, and to Blockbuster.

If you are using credit cards to purchase groceries, gas, utilities, or rent movies at Blockbuster then you may want to step back think of the financial mess that you are creating. You should step back and ponder; “What the ########## am I doing with my life?” It is very easy to run up mountains of credit card to pay for your basic living expenses. If you don’t pay them off your credit card debts at the end of the month, then are essentially just paying interest to eat, and the debt never goes away and it just gets larger. Essentially, you will be paying interest on your Blockbuster bill for years to come. A movie that you rented for $4.50 will ultimately cost you $10 to $15 once you pay off your credit card bill. What a stupid way to live! When you pay for all of your expenses with a credit card, then many debtors feel like they are not spending any money at all. When you receive your credit card bill, then you may be surprised what you purchased with your card, as opposed to what you might buy if you were paying in cash. If you never have any cash, or never seem to pay off your credit cards because you use them for basic living expenses, you may consider bankruptcy.

11. You can’t even afford the minimum payment that is due on your credit cards.

When you have large amounts of credit card debt, high balances, or if you are over the limit on your credit cards, then this means the credit card interest is growing and your minimum monthly payment is growing as well. When you first got your credit cards, the minimum payment due was probably low, maybe $20 to $50 a month. After using the card for a while, and if you should get sick, suffer marital problems, or suffer any other setbacks, then you could easily find yourself with $1,000 to several thousands of dollars of consumer debt. Once you are no longer able to make the minimum payments, then bigger financial problems are usually right around the corner. If you can’t even make your minimum payments on your credit cards then you may want to consult with a bankruptcy lawyer.

12. You are stuck in the payday loan cycle and/or use payday loans to pay your rent.

If you are in the vicious cycle of using payday loans then it may be the right time to file for bankruptcy. Bankruptcy wipes out payday loans. If you never seem to be able to pay them off, then you are not alone. It’s quite common for people to use a payday loan once and then get stuck into the vicious cycle of using them over and over. Using payday loans is similar to getting hooked on drug. A simple pay day loan of a $100 temporary payday loan can easily balloon up to a debt of $1,000 in no time. It can be worse if there is more than one payday loan. The interest on payday loans compounds daily.

If you can’t live without using a payday loan to get by or pay your rent, then bankruptcy may be able to solve your financial problems. You may not be making enough money or you may live beyond your means. Either way, the cost of using payday loans to make past due credit card payments, medical bills, or to pay the rent should be weighed against filing for bankruptcy. Bankruptcy can wipe out payday loans. So if you are caught in a payday loan cycle, then you might consider bankruptcy as an option to get rid of the debt.

13. All of your most valuable jewelry and other personal items are either pawned, or are frequently “in and out” of the pawn shops.

If the manager of a pawn shop knows you by your first name, then you may want to consider bankruptcy. If the workers at the pawn shop know you as a regular customer who pawns his jewelry and rings on a weekly or monthly basis, then  you may have serious debt problems that bankruptcy may eliminate. Pawn shops, just like payday loan companies charge exorbitant interest rates. So much so that it can get you hooked on paying their interest to the tune of 4, 5, or 6 times the money you originally borrowed against your own property. Once you pawn something, and then something else, and something else, then you start working for the pawn shop. Once you start this vicious, it is difficult to stop if you want to keep your personal property.

If you pawn your personal property to make then minimum payments on past due credit card payments, medical bills, or gambling debts, rent, or pawn things to just to get by, then you may want to consider bankruptcy. Bankruptcy law permits you to keep a certain amount of your personal property, and this includes your jewelry. If you have debt problems, and if you are pawning items to pay your debts, then you may be flushing your money down the toilet bowl. You should consider filing for bankruptcy instead of being used by a pawn shop.

14. Your car is going to be repossessed any day now.

If your car, truck, RV, SUV, or any other vehicle you may now own is being hunted by the repo man, then you may want to consider filing for bankruptcy. Chapter 13 Bankruptcy will stop a repossession and allow you to repay any missed payments over 3 to 5 years. Moreover, if your car has been recently repossessed, then bankruptcy may allow you to get it back. Don’t wait until the repo man is in the driveway, or your repossessed vehicle is on the auction block before you consider bankruptcy. Bankruptcy stops repossession. So when you car, truck, RV, or SUV, is being hunted by the repo man, file for bankruptcy. It is not easy commuting to work on a bike. You can’t take out a date out on your bike. Moreover, how can you carry your groceries home if you only use a bike. Moreover, if you lose your car, good luck getting a new car loan with bad credit. Save your car and file for bankruptcy!

15. Your house is in middle of a foreclosure case.

Foreclosure is usually never a good sign, so if your home is in foreclosure then you may want to consider filing for bankruptcy. Even though there are several options to stop foreclosure, many of those options fail, nor do they absolutely stop foreclosure. If you are eligible to file for a chapter 7 or a chapter 13 then filing bankruptcy will stop a foreclosure. Therefore, if your home is up for foreclosure, then you may want to consider filing for bankruptcy before your home is sold.