Each month when you sit down to assess your finances, you end up with the same result. It is frustrating to work so hard and still be unable to make your paycheck cover your bills. If you are consistently behind on your credit cards, mortgage, car payment or other debts, you may find it hard to sleep at night and dread answering the phone when it rings.

Most everyone goes through hard financial times now and then. It often doesn’t take much to send your budget into disarray, and it may take time and sacrifice to get things back in order. However, do you know when you are in a situation that is futile? If you have ever considered filing for bankruptcy, you may wonder when the time is right.

Signs you may be ready for bankruptcy

Over 900,000 Americans filed for bankruptcy in a recent year. The Constitution allows this method of debt relief, but it has obtained a stigma that may make you feel embarrassed to take the first important step. Of course, bankruptcy is a last resort, so you have likely tried everything else you can think of, including negotiating with creditors, taking on extra work and paring back on needless expenses. Still, these are the common signs that convince many consumers it is time to seek bankruptcy relief.

  • Your creditors have turned your account over to a collection agency who has filed a lawsuit against you.
  • Your creditors have won the California court’s permission to garnish your wages.
  • You are using credit cards to pay for daily expenses and regular bills.
  • You are in the middle of a financial crisis, such as a job loss or medical emergency.
  • Your mortgage lender is threatening foreclosure.

It is possible that you are experiencing all or most of the items listed, leaving you with few options for getting out from under the crushing weight of your debts. However, it is important that you explore all your alternatives before taking this major step.

Emerging from bankruptcy takes time and discipline, so you should be certain you are prepared to take on the challenge. Seeking advice and answers first is always a wise move. If you are successful, you will have the opportunity for a bright future free of debts and the chance to rebuild your credit rating.