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Bankruptcy attorneys all over the country are reporting that their business is up 25-50% over last year. The reason? New bankruptcy legislation is set to take effect later this month, and the laws are much stricter than in the past. That may be the case, but the fact that tougher laws are coming doesn't mean that everyone should rush out to declare bankruptcy. Still, many people are undoubtedly wondering if their own situation warrants such a drastic choice.
Here are a few things to consider when deciding if you should file:
# You are writing checks when the money isn't there – This is something that most everyone has done from time to time. Your bill is due on Tuesday, but you don't get paid until Friday. So you write the check, put it in the mail, and hope that by the time the check clears, you'll have your paycheck. There are a couple of problems with this. The time it takes for a check to clear is much shorter than it used to be. Checks can often clear overnight, and if the money isn't there, you can be assessed late fees by both your bank and the payee. As a bonus, we should point out that it's illegal to write a check when you know that the money isn't in your account.
# Are you paying for groceries with credit cards? We don't mean doing so when you forgot your checkbook; we mean doing so when your checkbook is empty. Groceries are a recurring expense. You need to eat each and every month, so you should have money set aside for food. If you don't', and you find yourself using your Visa card to buy your milk, you've probably got a serious problem.
# Your credit cards are maxed out and you are applying for new ones – When your cards are full, it's time to pay down the balances. If you are applying for still more credit because the cards you have are full, you're in trouble. More credit won't make the problem better; it will undoubtedly make it worse.
These are just a few things that might be warning signs of serious financial trouble. If you find yourself doing one or more of them on a regular basis, it's time to take a serious look at your total financial situation. Now might be a good time to discuss this with either a credit counselor or a bankruptcy attorney. And nothing good comes from waiting, so do it soon.