There's no minimum dollar amount that you have to owe in order to file for bankruptcy -- which means that there's no clear line that debtors can look at in order to decide that it's time to take that step as opposed to merely tightening their grip on their wallets and trying to work their way out of their financial tangle.
How do you know when it's time to file bankruptcy? Here are some signs that the financial struggle is either no longer worth it or only prolonging the inevitable:
1. You can't make more than the minimum payments on your credit card -- or can't even make those.
If you're only able to scrape together the money to make the minimum payments on your credit cards (or sometimes even failing to do that), the odds are good that bankruptcy would help you in the long run. Unless you're just in a temporary situation (between jobs, with fairly good prospects for finding another one), climbing out of your financial hole is going to be a long, hard climb that could take decades -- while bankruptcy offers you a fresh start and a chance to start rebuilding your credit almost immediately.
2. You're using your credit card to pay for groceries, utilities, or other basic necessities.
It's one thing to occasionally throw an expensive dinner on your credit card -- it's quite another when you have to use your credit card just to get groceries to last through the week or keep the electric on. That's a sign that your debts are out of control. Take a look at your situation and see what your financial life would be like if all the unsecured loans or credit card payments were erased -- that will give you a clearer idea of how your situation might improve if you file bankruptcy.
3. You've totally lost control of your debt and panic even thinking about it.
If you don't even know how much you owe and are simply throwing a payment at whichever bill collector is hounding you the hardest, you've probably passed the point where you should have filed bankruptcy a while ago. When bill collectors are stalking you, your debt is causing panic attacks, or you can't even guess how bad your debt really is, it's time to talk to an attorney about your options.
No matter how you got into this kind of debt, bankruptcy is meant to give debtors relief and another chance -- and it's usually a relief once you make the decision to step out of your situation. Rather than abandoning the whole problem, you're actually taking control of your finances in the only real way that you can. For more more information, talk to a bankruptcy attorney today.