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Usually, bankruptcy warning signs appear long before they are detected.

Usually, bankruptcy warning signs appear long before they are detected.
"""It often comes as a surprise to individuals when they are forced to declare bankruptcy. However, if they had followed the indications, they would have been alerted to their dire financial situation much earlier.

Once they begin to abuse their credit cards, the financial decisions of a large number of people swiftly deteriorate. How does credit card abuse manifest itself? Rolling over credit card balances while continuing to charge for items for which you do not have the cash is the primary symptom.

Typically, your income is sufficient to cover the minimum payment when the credit card account is due at the end of the month. Nevertheless, if you lost your employment, you would be temporarily unable to pay off the minimum balance for the month.

And only when a payment is past due do late and over limit fees begin to accrue. Clearly, the longer you are unemployed, the more dire the situation becomes. And when you finally obtain employment, you will discover that you are so far behind on your expenses that you cannot catch up.

A catastrophic illness in the family is a second, but frequently unavoidable, indicator that you may be bound for bankruptcy. If you are fortunate enough to have health insurance, the financial impact will be mitigated. Even with health insurance, a catastrophic illness can quickly deplete the financial resources of a typical family, compelling them to rely on credit cards to cover some of the medical expenses.

As we have seen, once you are forced to use credit cards, your financial situation has a high likelihood of deteriorating. Even with adequate health insurance, the deductibles for a severe illness can wipe out the savings of the majority of middle-income families. And if you have inadequate health insurance, the financial devastation will occur much sooner.

Living paycheck to paycheck is the final indicator that a financial collapse is imminent. In this manner of living, there is literally no margin for error. Unfortunately, this is inevitable for many families. They have already reduced their essential expenses to the absolute minimum and are still scarcely surviving. For others, however, the issue is merely excessive consumption. At least these families have a choice. However, if they continue to overspend, they run the risk of filing for bankruptcy themselves.""

" - https://www.affordablecebu.com/
 

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"Usually, bankruptcy warning signs appear long before they are detected." was written by Mary under the Finance / Wealth category. It has been read 118 times and generated 0 comments. The article was created on and updated on 01 June 2023.
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