|
Bankruptcy – Look For The Warning Signs
By: Charles Essmeier
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.
About the Author:
©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro
Marketing, a firm devoted to informational Websites, including http://www.End-Your-Debt.com,
a site devoted to debt consolidation and credit counseling.
|
