Filing for bankruptcy is not inherently bad or good, it will always depend on your situation because although you may be losing some properties or businesses, at least you will be saved from being sued by your debt collectors. Even until 2016, business establishments and individuals filing for bankruptcy have declined to a number of 794,960. Whereas 490,465 of those cases have been filed under Chapter 7, individuals or business establishments who file for this type of bankruptcy means there is no longer a future for the business and the existing assets cannot even fully compensate for the loss. Still, this means that bankruptcy can happen to anybody, so how will you know the signs that you may be falling into the trap of bankruptcy? Let’s find out.
- You can no longer pay the bills
Forgetting to pay your bills isn’t a valid response to a situation when the truth is you can no longer pay them for not having enough money to attend to your responsibilities. There can be a few reasons why you haven’t been able to pay off your bills:
- job layoff
- declining business profit
- financial debt from a recent hospital bill or a family member’s death
While those factors may or may not be in your control, your responsibilities still remain. If you find yourself turning to your credit cards just to pay off your bills, then it’s a clear sign that you’re in debt and you may be on your way to bankruptcy.
- Your debt collectors are becoming relentless
Whether it has amounted to multiple calls at different times of the day or you are being sent tons of letters awaiting your response, your debt collectors will usually end up being relentless when you haven’t paid your dues in a long while and it seems as if you don’t have any means of doing so in the near future. When it comes to the point that you have kept on ignoring and avoiding them, they might eventually file a lawsuit against you, which can only add a bad reputation for you and your business.
- You’re losing money
Your financial resources from investments and assets have been dwindling down and you can’t seem to figure out how that can possibly happen within such a short period of time. It would be evident that there is a huge problem when you are losing more money than your actual profits.
- You no longer know where to get your employees’ next paycheck
With the continuous loss of money and the fact that you cannot even pay your own bills anymore, it may inevitably come to a point where you will be stressed about wondering where to get your employees’ next paycheck. When this happens, you should know you are already at loss and you might need to talk to a lawyer about filing for Chapter 7 bankruptcy.
A great lawyer will be able to advise you on the proper legal proceedings to follow to make sure you stay protected after surrendering some of your assets in order to pay your debts to your creditors. This may not be what you may have imagined, but it is a problem that you can still find a solution to under the supervision of a proper legal advisor.
Michael Lawson is a specialist bankruptcy attorney who has helped many clients in the past move past their bankruptcy. He currently writes for Blclawcenter.com. In his spare time, he likes to enjoy some downtime traveling with his family.
