You should be mindful of your financial well-being at all times. Who could ever think that spending $10 here, and another $20 there can hurt anyone. But the truth of the matter is if you don’t budget for these “little” expenses, they will eventually add up to become a bigger expense and debt in your life. You would never think that one little purchase/misstep can force you into bankruptcy, but if you keep ignoring and give no importance to how you are managing your money, bankruptcy can come upon you quicker than you can imagine. If you find yourself in any of the situations below, you might be staring into the face of bankruptcy in the near future:
You are living paycheck to paycheck, hence no savings
Saving a percentage of your income should be your number 1 goal when you started earning a living. Having a little bit of money saved for the rainy day is important for anyone, not just for the poor or medium income earners. What if you get laid off from your job? Where would you have the money to support yourself? Your only option if you do not have any savings is to use the credit card for survival. The problem with using credit card is that the debt accumulates rather quickly. It is easy to lose yourself financially using the credit card. One day you might have to find yourself a bankruptcy lawyer.
The terms of your mortgage are just mumbo jumbo to you
Prior to signing your mortgage documents, read it cautiously and know all the terms and conditions of the mortgage and how the additional expense will impact your life. Is your loan a fixed rate loan, an adjustable rate mortgage (also known as ARM), a zero interest loan, is there an early repayment penalty? All these are crucial information you will need in order to budget your money accordingly. If you fail to understand the terms and conditions of your mortgage loan, you might over-extend yourself. One day you might find yourself with a much bigger mortgage payment, and without any real savings, you are again looking at the chance of filing for bankruptcy protection. Experienced Bankruptcy Attorneys in San Diego will provide proper protection to the person to get the interest. The credit statement should be furnished to the person.
One day you are surprised by a large credit card statement
Everyone has easy access to the credit cards which can present a big issue if you do not manage your spending carefully. Think twice about buying that new iPhone by charging everything on your credit card and make sure you can afford it in the budget. Before purchasing something using the credit card, ask yourself if you have accounted for it in the budget, or if you can hold off making this purchase. Do not get into the habit of buying something on the “whim”. Most of the time if you are an impulse buyer, whatever you are buying normally isn’t what you need. Purchasing what you don’t need is not necessary bad, but it can cause you to have more debt when you cannot afford the purchase initially already. Once again, if you cannot pay off the debt, it is another case where you will be looking at bankruptcy protection.
You need to use cash advance or payday loan to get through the month
Payday loan and cash advance from credit cards can solve your temporary cash insolvency problem, but it should not be used to fund any big purchases on the “whim”. If you do not take care of your finances by not using cash advance or payday loan, you might just have to face bankruptcy at a later point in your life.
You will transfer the balance of one credit card to another
Credit card companies are forever promoting balance transfer checks for low interest rate with extended period of time to pay it off. Don’t get into the habit of doing this. If you find yourself with a lot of options to move your debt around, you will also find a way to finance something you don’t really need. Do not get fool by the credit card companies with the teaser interest rate for doing a balance transfer. The teaser rate is only temporary and once it resets, you will still have to pay the high interest as previously. This debt will never go away if you keep doing the balance transfer between accounts. This situation can become worst if you accumulate more debt along the way, hence forcing you into bankruptcy filing.
Try to be smart about your money, make a budget that you can live with and stick to it. So long as you can stick to the budget you have set for yourself, you should not incur so much debt that you have to seek for bankruptcy protection. Do not think that bankruptcy can solve all of your problems, it can relieve you of your debt, but it will also come with its own headaches too.