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Knowing When It’s Time to Consider Bankruptcy

Worried couple reading a letter at home

In our years in practice, we’ve helped many people get a fresh start with personal or business bankruptcy filings. We’ve also had many people come to us after waiting far too long, limiting our ability to minimize the consequences of a bankruptcy filing. We know there can a lot of reasons to put off the decision to file:

  • You may be overly optimistic, certain that you’re about ready to turn a corner
  • You may perceive a stigma tied to a bankruptcy filing, that it’s a sign of your personal or business failure—that’s not the case, as Walt Disney, Henry Ford and even Abraham Lincoln would attest
  • You may think that you don’t qualify under the 2005 revisions to the bankruptcy laws

One of the keys to most effectively using the bankruptcy laws is to know when it’s the right time to file. Here are some telltale indicators that are a sign when you should confer with a bankruptcy lawyer:

  • Your credit cards are maxed out or near the limit and you can only make minimum monthly payments — this is the classic way to throw good money after bad. The higher your credit card balance, the more you pay in interest. That only benefits the credit card company.
  • You make important payments late every month — If your rent, mortgage and car payments are always late, you are probably paying late fees…again, that’s money that’s being thrown away
  • You regularly take cash advances or take out payday loans — This is the best sign that you don’t have the discretionary income to pay your bills. This is nothing more than borrowing against your future, and only digs the hole deeper.
  • You pay for essential items with a credit card — If it’s to get some card-related benefit and you pay the balance off every month, that’s fine. But if it’s because you don’t have enough income to pay your financial obligations, you are in trouble.
  • You’ve overdrawn a bank account more than once — Everybody can make a mistake, but when you are perpetually overdrawn, you need to do something differently. Otherwise, a significant amount of what you do earn goes to pay overdraft fees.

Contact the Law Offices of Howard N. Sobel

For professional and knowledgeable legal counsel with a personal approach, contact our office by e-mail or call us at 856-424-6400. We are available evenings and weekends upon request. We take all major credit cards. Home and hospital visits can be arranged for personal injury victims.

Named a New Jersey SuperLawyer Every Year Since 2010