How to Notice Debt

Although debt can be crushing and devastating, the truth is that it is fairly easy to either ignore or forget about how much money you owe. Because of that, it is easy to get into a situation from which you cannot escape. When making the decision to file for bankruptcy, people often say that they didn't realize "how bad it was," or that they thought they could "handle it." This sometimes comes from the cultural attitude that one should do everything for oneself, and a person is weak or undeserving if he or she cannot handle everything on his or her own. This is simply not the truth, and this kind of thinking can be very damaging. If, after reading this article, you notice that you have unmanageable debt, it is important to deal with it promptly and appropriately.

Look at Your Budget

Most individual adults and families have weekly or monthly budgets that account for large and small purchases, bills, rent or house payments, groceries, and other such necessities. If you examine your budget, what do you see? Can you pay for your weekly or monthly necessities or do you have a tendency to charge things to a credit card? Are you able to make loan payments or are you struggling? Do you have back taxes or other similar issues? If you do have these problems, why? Is it because you simply do not have the money or because you are using your money for frivolous purposes? Money management is an important part of staying on top of your bills, but unfortunately, there are some occasions on which it is simply not enough.

Questions and Answers

Once you calculate how much you owe to all of your creditors, it is important to ask yourself a few questions. How much of your debt is because of sincere lack of funds and how much of it is due to money mismanagement? This can be a difficult question because you may have mismanaged your money in the distant past and are still suffering for that mistake now; you may want to speak with an attorney if you do not know the answer. Ask yourself if you can realistically make your payments on your own. Don't say that if you just work more you'll be able to make your payments unless you can realistically work more without mismanaging other parts in your life. Additionally, you should ask yourself whether or not the risk of repossession or foreclosure, if it applies to you, is worth trying to do it on your own. Most people in your situation benefit from bankruptcy because the answers to these questions are rarely positive.

What Next?

What should you do once you have decided that your debt is indeed unmanageable? You have the legal right to file for bankruptcy, and it is a good idea to do so before your debt, and therefore your credit score, gets worse. It is relatively easy to file for bankruptcy as long as you are honest and thorough; all you need to do is hire a good attorney, sign all relevant paperwork, and provide the information your attorney needs to best help you.

"I was worried I would lose everything. Brian helped me sort things out and restored my life. I don't know where I'd be without him!"

-Sue H. Ogden, UT