Bankruptcy – Look For The Warning Signs

The Bankruptcy Abuse and Consumer Protection Act, signed into
law last April, will take effect this month and bring with it
some of the most sweeping changes in debt law in history As the
new requirements are much more strict, expensive, and time
consuming than the old ones, consumers with problem debt are
rushing to file now But many others are wondering if their debt
problems are serious enough to warrant the rather drastic
decision to file for bankruptcy
Here are a few things
that may help you reach a decision:

You have two or
more major credit cards with outstanding balances – Credit cards
work best when used for convenience, such as when you don’t have
cash with you or when it just isn’t convenient to pay cash They
work less well when you use them as a funding source, as they
represent a fairly expensive way to borrow money If you have
more than two major credit cards with outstanding balances that
are high enough that you cannot pay any one of them off right
now, you may have a problem

You make minimum
payments only on your credit cards – The minimum payment doesn’t
even put a dent in your balance, and until recently, the minimum
wouldn’t even cover the interest accrued during the month If
you are only making minimum payments on your credit cards
because you cannot afford to send more, then you may be in over
your head

You are paying one credit card bill
with another credit card – Taking a cash advance on a credit
card is really expensive The interest rate is usually higher
than for purchases and the cash advance often includes an
additional fee If you are taking a cash advance from one card
at 20% interest to make a payment on another at 20% interest,
you are probably in trouble

This list is by no
means definitive or complete Nor should it be construed as
legal advice But if you see yourself doing one or more of the
things listed above regularly, it may suggest that your
financial problems are quite serious Now would be a good time
to consult with either a financial advisor or a bankruptcy
attorney Financial problems only get worse when left
unattended, so don’t wait

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