Watch Out For These Signs You Are Heading for Bankruptcy
Every year, thousands of people across Canada file for bankruptcy.
Rarely, though, does it happen randomly.
You can almost always see it coming.
So what are the signs?
How do you know for sure that you’re heading for a bankruptcy filing?
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You Get Regular Collection Calls
In the early stages of debt collection, your creditors will contact you directly.
Mostly, they’ll agree to extend repayment deadlines by a couple of weeks or months, so long as you agree to pay a late fee.
If you don’t pay, though, they will eventually pass your case onto a debt collection agency – a company with the legal authority to follow up on the debts you owe.
These organizations are ruthless.
They will often ring you all day long until you pick up the phone, either using a human operative or a Robo-caller.
It is distressing.
Getting regular calls like these is usually the first sign of impending bankruptcy.
The purpose of these calls is to attempt to collect the money that you owe, but often you do not have the means.
There’s A Pile Of Unopened Mail By The Front Door
Creditors and debt collection agencies will try to get into contact with you using whatever means they can.
For that reason, they have a penchant for sending you regular letters in the post (and will sometimes bill you for the privilege).
If you owe money though, you don’t always want to open correspondence and digest the contents.
It is too depressing. Instead, the letters build up on the side, unopened.
Of course, as with phone calls, ignoring these communications won’t make the problem go away.
In fact, doing this could make it worse.
When you leave mail unread, you know less about your financial position and the money you owe, and ultimately you deny yourself the power to resolve the problem.
You’re Borrowing From One Creditor To Pay Another
In the early stages, borrowing from one person to pay another seems doable.
By taking out additional lines of credit, you can ensure that you make payments on your existing ones on time.
Unfortunately, as with most Ponzi-style schemes, you eventually run out of people to lend you money, and the whole edifice collapses.
Worse still, you wind up with a much bigger debt problem than if you had just left your existing debt unpaid.
Borrowing from one person to pay another is sustainable in the short-term, but it invariably leads to massive financial ramifications over time.
The deeper you go down this route, the more likely a sudden and abrupt bankruptcy becomes.
Your Debt Mountain Is Just Too Big
Sometimes the amount of money you must pay to creditors each month is just too vast.
If you make $3,000 per month after-tax, but creditors want $2,750 from you every month, you cannot realistically pay the debt.
You only have $250 per month for all your other needs: fuel, accommodation, food, entertainment and so on.
Don’t despair, though.
If you feel like you might be heading for bankruptcy, you still have options.
Bankruptcy help experts can provide you with advice, assistance and opportunities to help you get your finances back on track.
How to File for Bankruptcy
What is Bankruptcy?
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?