10. You have no savings.
As much as we would like to think otherwise, disasters happen. Without a savings buffer, often the only choice is to go deeper into debt, often at very unfavorable terms.
9. At least one bill was paid late each of the last 6 months.
Everyone misplaces a bill now and then. But a pattern of missed bills adds costs and affects your credit rating.
8. You are receiving this month's bills and last month's are still unopened.
It is at this point people have given up hope on dealing with their financial situation. Now is the time to be talking to your creditors, not ignoring them.
7. Creditors are calling.
If you are going to ignore the mail, creditors will have to resort to a more direct approach.
6. Using credit cards to buy groceries and other necessities.
Buying groceries on credit adds to your debt load and indicates a lifestyle in excess of your ability to pay. This is the time to cut up the credit cards and pare expenses to the absolute minimum.
5. Using credit card cash advances to make other credit card payments.
Robbing Peter to pay Paul: not exactly true, but close. It is at this point that the downward spiral turns into a mudslide. Once on this path, the financial end is coming soon.
4. Threats of utility shut-offs.
The danger is now real, iminent and very serious. These items are necessary for your day to day survival. At this point bankruptcy may be your only choice.
3. Creditors have stopped calling because your phone is disconnected.
Many people feel relieved when this happens: no more nasty creditor calls. But recovery from this point will become more difficult and costly even with a bankruptcy.
2. You swapped cars with a relative so your car will not be repossessed.
Desperation on your part and your creditors. Repossessions can be a dangerous and humiliating experience. In many cases it can be the first outward sign to friends and family that something is seriously wrong. For a few this desperation turns into illegal behavior.
1. You have received court summons for foreclosure or eviction.
The bottom. Legal assistance is all but mandatory at this point. There is often no where else to go. This is the time many people finally seek an attorney's help. There is not much left to work with and an attorney can only clean up the loose ends and leave you to start putting your life back into order.
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