The common belief is that people filing bankruptcy become so tired and exhausted. But, this is not true, sometimes there are chances that the poor choices and bad luck of an individual turns out to be the important factors in increasing the debt thereby turning it to be a hard-to-handle thing. Over-exploitation, sudden illness, loss of job and many other unforeseen circumstances can force an individual to get more and more money from others and when this continues, he will be forced to a situation, where he will not have any money for repaying the loans obtained. All these things can ultimately lead to filing bankruptcy to start the proceedings again from the beginning.
If you are worried as to whether you might be heading towards the situation of filing an insolvency, the following warning signs can be looked for so that you can immediately take the help of a professional for appropriate advice, so that the situation can be avoided:
Too much credit card debt: The largest monetary disease that affects many homes these days is the credit card debt. With the average credit card debt increasing day after day, consumers are now feeling the heat. So, in such a situation you can get professional advice to protect yourself from personal bankruptcy.
Overusing home equity line of credit: You can be tempted to use a home equity line of credit for financing a new car or a piece of furniture. But, keep away from this type of temptations. Remember that your house is in danger and any type of loan using your home as collateral security can be dangerous. It is better to use the money only for some remodeling projects or during some unforeseen circumstances. Many people forget to keep in mind that the payments are to be made to the current rate of interest. If there is an increase in this rate, the money to be paid by them will also increase.
Living paycheck to paycheck: It is found that the average savings of people is keep on decreasing these days. This is a sign of risk as they will not be left with any reserve to meet the expenses pertaining to emergency situations like sudden medical illness, job termination, etc… So, it is better to ensure that good savings are made and if you are living paycheck to paycheck without any savings or with minimal savings, this is the time to seek professional help to avoid personal bankruptcy.
Other situations like co-signing a loan and foreclosure and repossession are also warning in nature.