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Signs you may want to file for bankruptcy

On Behalf of | Jul 11, 2024 | Bankruptcy

Facing financial difficulties can be challenging, and recognizing when to consider filing for bankruptcy is crucial for residents in Minnesota. It can be helpful to know some signs that this legal tool could be a beneficial step for you.

Escalating debt

If your debts continue to grow and you see no feasible way to manage them within your current financial situation, bankruptcy might offer a path to relief. This is especially true if your debts significantly surpass your total assets. At this point, it might be time to consult a professional.

Minimum payments overwhelm you

When making the minimum payments on your credit cards or loans becomes unsustainable, it’s a strong sign that your financial health is at risk. Persistent struggles with meeting these minimum requirements can lead you toward insolvency.

Facing legal actions

If creditors are threatening to sue or have already begun legal proceedings against you for unpaid debts, bankruptcy might help protect your assets and wages from garnishment.

Using credit for necessities

Relying on credit cards to pay for daily necessities like groceries, rent, or utilities is a red flag. When you use credit to make ends meet, the financial situation is likely unsustainable due to the high interest rates and other costs of credit.

Evaluating your options

Filing for bankruptcy is a significant decision and understanding the signs can guide you to the right choice. If these situations apply to you, consider seeking advice from a financial counselor or attorney to explore your options and potentially start afresh with your finances in Minnesota. Taking this step might be just what you need to reset your financial health.