What it’s like before filing for bankruptcy

The time leading up to bankruptcy can be very trying. Every situation is different, but you typically feel your financial picture start falling apart, and you do everything you can to save it.

In that sense, bankruptcy is just an option to pick up the pieces. It can be the end result you’re searching for. It can open other doors you never considered.

The alternative is rough and may prove impossible. Some people are getting sued. Creditors are garnishing their wage. They’re working multiple jobs, just trying to get ahead, but their debt makes it impossible. They feel completely overwhelmed.

The reasons aren’t always your fault

The reasons you find yourself in this position may be completely out of your control. For instance, one young woman simply got sick. She’d spent her entire life working on her credit and advancing her career, but that illness, which she called a mystery, took it all away.

She couldn’t go back to work. She was getting treatment and in constant pain. Without any income, she fell way behind on her bills. She lost her apartment and had to move back in with her mom and dad. They had to pay off her car for her and cover her other costs of living.

In telling her story, she was honest. The illness pushed her into depression. She broke down crying while talking to a legal expert about bankruptcy. It was not something she’d planned for and, really, it was something she’d tried to avoid.

She did eventually fight through it. She got her head around the idea that it wasn’t her fault. She filed for bankruptcy and then started working on her credit score. She was able to put her life back together.

Other signs

Again, all situations are a bit different. Other common signs of a looming bankruptcy that you may notice include:

  • Getting a home equity loan and then using it up. This is one way to spread your debt out on your own, but using it up and then seeing more debt accumulate means there are serious issues.
  • Picking and choosing what bills you pay because you can’t pay them all.
  • Running out of emergency money. You had a few thousand dollars in the bank, for instance, but you burned through all of it.
  • Maxing out credit cards. The cards aren’t just carrying a lot of debt; they have so much you can’t even use them.

When you see these bankruptcy red flags, it’s time to start looking into all of your options. Be sure you know where you stand and what you can do. Some life changes may be coming, but, as the young woman found out above, there are always options.