Any person who is unable to pay the debts he owes to his creditors may be a potential candidate for declaring bankruptcy.  Most individuals who have been caught in the debt trap or have lost all their savings may well have become unwitting victims of ‘excessive consumer spending’. Consumer debt typically consists of (ostensibly affordable) car loans, home finance and even monthly credit card payments.

You may need to file for bankruptcy in certain circumstances when your creditors send you more bills that you have the financial capability of paying or after having become insolvent.  This may be for the following reasons

You Cannot Keep Up With Your Ever Increasing Debt

If you find yourself paying  bill after bill and have lost all track of both interest as well as principal amounts and are not able  to pay even minimum amounts every month just to keep your ‘head above water’ so to speak even as the interest payments keep on increasing. Then you are definitely a candidate for declaring bankruptcy.

Even Living Expenses Seem Out Of Reach

Basic expenditures that are part and parcel of everyday living such as food, utilities, housing expenses, schooling for the children, clothing etc must be well within the financial reach of almost every working individual. If that is not happening and  you find that you are actually struggling to meet even the most basic requirements of both you and your family while simultaneously doing your utmost to pay your bills, something is very obviously wrong. If you find that the most basic of expenses have to be met through the usage of ‘high interest rate ‘charging credit cards and now you can’t keep up even with your day to day expenses than you need to think about the fact that bankruptcy may be the only viable option.

Losing Most If Not All Of Your Property

In bankruptcy the unfortunate insolvent ends up losing his property. Typically, a trustee is appointed by the court to handle the required bankruptcy paperwork and oversee the sale of the property of the person who has declared himself bankrupt. The proceeds from the sale of this property are than utilized to pay off either all or as many of the creditors as can be reasonably covered through such a sale.

To lose all of one’s property and watch it being auctioned off in front of one’s own eyes is certainly not a pleasant experience, so make sure that you do this only and only if you have no other viable options.

Explore Other Options As Well

Regardless of how desperate a situation may seem, there are generally other options available. If its debts that are creating a problem, then you may consider hiring the services of a credit management agency that will help you discharge your debt obligations in an orderly manner.  Alternately you may talk to your creditors on your own and try and convince them to give you more time.  Then there are friends and family members you may approach who just might be able to help tide you over till you regain your financial footing.…