Bankruptcy is a very real situation that can happen to  anyone.  Even rich people who have huge  savings in their bank accounts can fall victim to bankruptcy if they do not pay  attention to their way of life.  Getting  stuck in a debt problem is a serious matter.   If you find yourself in any of the following situations, it would be  best to address the problem right away.   Here are the ten signs that you need to talk to a bankruptcy attorney,  immediately.

Your expenses offset  you monthly income.
Stop and take an objective look on your spending.  Do you spend more than what you actually earn  in a month?  It could be easy to deny  this fact.  However, the best way to  answer this question is to calculate all your monthly expenses in detail.  List them down, every little cent you spend  in a month should be included, be honest. 

After calculating the sum total of all your expenses,  subtract it from your salary, and you should be able to come up with an  accurate answer to the question. 

You often maximize  your credit limit.
Do you spend so much on your credit card that most of the  time your credit limit is maxed out?   This is a major red flag that sooner or later, you’ll be filing for  bankruptcy.  Ask any financial expert and  they’ll tell you that as much as possible, you must not go beyond 50% of their  credit limit.  Apart from the fact that  you’re spending too much, maximizing on your credit has a very negative impact  on your credit score.  Creditors will  deem you as a high-risk borrower.

You are not clearly  aware about the exact details of your debts.
This could easily happen if you have several debts from  different creditors.  For example, you  may already have a mortgage loan, a car loan, a number of credit cards,  etc.  If you’re having trouble keeping up  with your debts and the due date of payments for each of your creditors, you’re  definitely in trouble.  Do something  before the situation gets out of hand. 

You alternately pay  your creditors with each due of payment.
If you can’t pay all your creditors promptly, obviously you  have acquired too many debts.  You don’t  need a professional to tell you that you are in a very risky situation.  You should do something about these debts  while you still have the chance.  If you  haven’t seriously considered strict budgeting, now’s the time to do so.

You never check  credit report.
This is a big mistake that many people take for  granted.  As a consumer, it is your duty  to personally check your credit report at least once a year to make sure that  you are keeping up with your debts, that your accounts are accurate, and that  there are no fraudulent transactions in your account.  Don’t wait until creditors start calling you  about unpaid bills which you’re not even aware of.  Protect your credit against fraud and  identity theft.
    
You’re arguing about  money matters.
If you find yourself frequently arguing about money matters  with your family, you should definitely try to seek help.  A reputable bankruptcy attorney can advice you  about what you can do to manage your finances more effectively.  Moreover, it’s important that everyone in  your family becomes aware of your present financial state and understands that  you will need everyone’s help to regain control over the situation.

Your creditors are  calling you.
When creditors start calling you about your debts, you  should see a bankruptcy attorney right away.   A bankruptcy attorney would know best on how to deal with the  situation.  Filing for bankruptcy may not  be the necessary move at this point.  You  may still have some options to straighten the situation.  In any case, you can’t manage to delay before  taking action. 

Read More 10 Signs You Need to Talk To A Bankruptcy Attorney

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The possibility of bankruptcy is very real.  If you think this could never happen to you,  think again.  In fact millions of  Americans have already filed bankruptcy at one point in their lives and most of  them never expected that possibility either. 

The truth is, everyone can be at risk of bankruptcy even  those who have lots of money in the bank.   Take a look at the following most common reasons why people end up  filing for bankruptcy:

Unfortunate  Circumstances
  Even rich people are affected by unexpected events that are  beyond control.  There may suddenly be an  illness in one of the member’s of the family and their finances can slowly  decline in just a matter of months or even weeks. 

Natural disasters like hurricane, earthquake, and other  accidents can happen at the most unexpected times.  The change in the economy or the loss of job  are all major events in life that can have a huge impact on a family’s  financial status.

Shortsightedness
  Knowing that the unexpected events can strike at any time,  it is only fitting to do the necessary preparations.  Do you set aside some of your money in  preparation for such emergencies?  Or do  you spend every penny of your monthly income, confident that you’ll have enough  salary the next month? 

Do you have a savings fund you can rely on in case you got  laid off from work or in case you got sick and unable to work for some  months?  Financial experts recommend  having fund in your savings account which is enough to last your whole family  for at least six months.  This buys you  some time if drastic changes in your lifestyle needs to be done.

Wrong Decisions
  The looming possibility of divorce, gambling, reckless  spending, self-destructive behavior, the lack of attention with the debts owed  – all of these actions, sooner or later can lead to bankruptcy. 

Investing in a business without doing extensive research or  ensuring the legality of the business can also lead to sudden bankruptcy.  These can all have been prevented if we only  choose to make the right decisions.  We  have control over these things and if these actions are avoided, the risk of  bankruptcy is greatly lessened. 

Clearly, there is something people can do to avoid filing  for bankruptcy.  The first thing would be  the awareness that bankruptcy is real and that nobody is exempted from this  possibility.  The government has  introduced the New Bankruptcy Law in October of 2005 and according to this law,  any one who wishes to file for bankruptcy must first seek credit counseling  from a government approved agency at least six months before filing his  bankruptcy application.

Latest statistics show that there has been a drop in  bankruptcy cases from 100,000 each month in the past years, to only 30,000  cases per month in 2006.  This dramatic  drop can be due to the new rules and restrictions that have been included since  the Bankruptcy Abuse Prevention and Consumer Protection Act took effect.

Read More 10 Reasons Why People File for Bankruptcy

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When facing a serious debt problem, a person may feel  helpless, stressed and frustrated.  You  may be vulnerable to threats and harassment from debt collectors.  However, just because you’re in debt doesn’t mean  you should be treated with less respect.  

Why  Debt Collectors Resort to Unfair Practices

Despite the existence of the Fair  Debt Collection Practices Act (FDCPA), many debt collectors still resort to  abusive tactics and illegal practices in an attempt to force borrowers to  pay.  The reason?  Many consumers are not clearly aware of their  rights and are hesitant to file a complaint.   Other consumers simply don’t want to go through a prosecution and thus  may put up with violations. 

But you don’t have to put up  with debt collectors who are trying to take advantage of your situation.  Know your rights as stated in the FDCPA and  protect yourself from unjust treatment.    For instance, you should be aware that a debt collector cannot use  harassment, false threats or abusive languages against you.  They cannot disguise themselves as a  government prosecutor or a representative of the BIR or FTC just to force you  to pay.  They cannot disclose any  information about your debts to any third party such as relatives, friends,  employers, or neighbors.  Collectors are  not allowed to call before 8 am or after 9pm unless you gave them permission to  do so.

If a debt collector is asking you to repay charges that you didn’t owe,  you can send a letter of dispute to your lender.  As soon as they received your dispute letter,  your lender should immediately conduct an investigation about the issue.  They have 30 days to resolve the matter.  During this period or while the investigation  is being conducted, they are not allowed to make any collection activity.

You can also request your debt collector to stop notifying you about  your debts.  However, bear in mind that  this doesn’t release you from your obligation to pay.  Even if the collection attempts has been  stopped, you should take the initiative to submit your repayments.

Take Action Against Abusive Debt  Collectors

If a debt collector is guilty of  violation of the FDCPA, what can you do?   The first step is to send a letter to your debt collector and notify  them about the violation committed against you.   Tell them to stop all their debt collection activities immediately.  Upon receipt of your letter, your debt  collector should respond positively and stop all its attempts to contact  you. 

If your debt collector refuses to cooperate, report them  to your State Attorney General’s Office right away.  Keep records of all your past and present  correspondence with your debt collector as this would help in proving your  claims.  It is also recommended to record  all your phone conversations with your debt collector especially if they are  guilty of harassment.

Don’t  forget to file a complaint to the Federal Trade Commission (FTC) as well.  The FTC regulates all debt collection  agencies in the US and if it received enough number of complaints from  consumers, the agency in question would be forced to shut down its operations.

Read More Protecting Yourself from Abusive Debt Collectors

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