People can face financial distress at any point in their life. And sometimes it can seem as if it just shows up out of nowhere to completely wreak havoc on your life as you know it.
Especially in the face of the COVID-19 pandemic, more people are finding themselves strapped for money.
It could be that you fell behind after losing your job. Or that unexpected medical bills arose and you didn’t have a backup plan.
Whatever the circumstance is, recognizing financial distress is one of the first steps in addressing it:
How to Recognize Financial Distress
Having to live in a paycheck-to-paycheck type manner for a few weeks might not necessarily indicate a larger problem.
So, how do you know when you are just having a hard two weeks versus when there is really a problem?
You are using credit cards to pay bills.
Credit cards can be dangerous. And if you are having to rely on your credit card to pay things such as utilities or rent, you know that something is wrong.
While it might keep you going for a little bit, it is ultimately snowballing into a larger problem for later.
You can only make the minimum monthly payments.
When you factor in interest rates, paying merely the minimum monthly payment on credit cards will have you paying far more interest over time. And depending on your balance, this could have you paying on this particular debt for years and years.
Additionally, it is a surefire way to let other creditors know they should probably stay away from you.
Or, you are missing payments altogether.
Making a minimum payment isn’t ideal, but missing a payment entirely is even worse. A string of missed payments can ruin your credit report.
You’re borrowing money from family and friends.
It is always nice to have family and friends who are supportive in your times of need. But you can’t rely on them to be able to support you forever. And some of them might just be giving you an interest-free loan, not a handout.
All of these different scenarios are only digging the hole of your financial trouble deeper. It is important to start working on a plan before it goes any further.
How A Bankruptcy Attorney in Atlanta Can Help
If you are in the midst of financial distress and aren’t sure how to proceed, it might be time to consider bankruptcy.
Bankruptcy, while traditionally looked at through a negative lens, can actually be a positive and structured plan back to normal.
There are different types of bankruptcy, like chapter 7 and chapter 13, to best fit an individual based on their situation.
Don’t wait until it is too late – start exploring your options today.
The Bankruptcy Lawyer You Need
Over the years we have helped many individuals find their way back to a positive financial plan through bankruptcy.