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Bankruptcy

: Bankruptcy Law Network

Drowning In Debt: When To Call A Bankruptcy Lawyer

By Mark Buckley, Rhode Island Bankruptcy Lawyer

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Weather forecasters gave us Rhode Islanders fair warning that we would be experiencing the worst rain storm in over one-hundred years. We even made national news.

Small streams were overwhelmed, the water table rose, and property owners that never before worried about such things were forming lines outside Lowe?s and Home Depot hoping to buy sump pumps, sand bags and shop vacs.

For most people, it was too little too late. The tools were inadequate and few were prepared to handle this amount of water. The damage was done.

The US financial crisis is very similar. As financial markets continue to weather the worst “storm” since the Great Depression, hard-working people who never worried about economic collapse are desperately trying to find work, protect their home from foreclosure, and keep credit card companies from suing them.

So, when do you decide that your debt problems are so bad that you need to file for bankruptcy? Do you only have a few inches of debt in your financial basement, or are you drowning in debt? Do you need to declare a state of financial emergency?

Here are a few considerations. You know it is time to call a bankruptcy lawyer when you experience the following:

1. Daily reliance on credit cards for living expenses. If you can?t buy groceries, put gas in your car, or pick up prescription medicine without relying on plastic, you need help now. There is a difference between using credit as a convenient form of payment and using credit because you have no money. The first month you are unable to pay your credit card off in full, you are entering very dangerous territory.

2. Reliance on overdraft. Many in financial crisis write checks they are unable to cover with their own resources. They might have $ 50 in their checking account, but they consistently write larger checks and rely on the bank to make up the difference. This is a very expensive and dangerous habit. Develop your own emergency fund. If you are single, or are the only income earner in your household, you should have a minimum of 6 months of cash to cover your fixed living expenses. Married individuals with dual incomes need at least 3 months.

3. Collection activity. It is not uncommon for those needing help to say they just don?t open the mail anymore. Maybe they are even throwing the bills in the trash. If you have reached this point, you need help now. When bills pile up, you need to take action immediately. This applies to those getting collection calls at home, or at work, and those who are being sued by creditors.

Don?t be tempted to use the wrong tools to handle your financial crisis. These include payday loans, cash advances, taking money from retirement accounts, and debt consolidation scams. A skilled specialist, like a bankruptcy lawyer, can explain all of your debt relief options available under the law.

Full post as published by Bankruptcy Law Network on April 28, 2010 (boomark / email).