23 Jul The Symptoms of Bankruptcy Part II
The reasons individuals file bankruptcy are varied. Part I of this series dealt with co-signing debts for others. This part deals with problems that arise when individuals maximize their credit limits by using all available credit without making any meaningful payments.
Maxing out the credit cards should be an obvious warning sign but sometimes it is not. For example, there are two scenarios where I see this problem all the time. First, I cannot tell you how many times that individuals have moved to Florida on the promise of having a job when they relocate. Of course, the job doesn’t pan out or for some other reason no longer exists. The credit cards were used for the moving expenses with the intention of repayment; however, with no income, the credit cards become the only source of revenue. Second, self employed individuals who continues working hard, running their businesses, and yet are unable to collect the money owed to them as receivables. They use, what I like to call, secondary financing, the credit cards, thereby strapping their business with additional debt, and at the same time, eliminating the potential margins that they were working for in the first place.
Let’s face it, if you are making the minimum monthly payments on your unsecured debt (lines of credit, credit cards and/or personal loans) without a reasonable plan of making substantial payments to reduce the debt, you are facing a very serious situation.
Latest posts by Carmen Dellutri, Esq. (see all)
- Chapter 13 Bankruptcy And Home Owners Associations - December 2, 2013
- 5 Reasons Every Small Business Owner Needs To Consult With A Bankruptcy Attorney - October 28, 2013
- Spouses Do Not Need To File Bankruptcy Together - August 28, 2013
- Is Your Homestead Exemption Bulletproof under 11 USC 522(o)? - July 31, 2013
- Can My Chapter 7 Bankruptcy Be Dismissed? - June 28, 2013