Every day, there are many people going bankrupt around the world. The shocking thing is that it happens to the people well conversant with good financial practice as well as these who have none. Even you could be facing bankruptcy. How then do you know that you’re headed for bankruptcy, so that you take the necessary steps to save your self?
Bankruptcy Warning Signs
• Warning Signs #1: you have neither health insurance cover nor inadequate coverage.
Fact: Most people will be driven to bankruptcy by escalating medical bills. This accounts for one out of every five bankruptcies.
• Warning Sign #2: frequently maxed out credit cards or paying way too little than you use.
Fact: more people have been thrown into bankruptcy by poor us of their cards than any other factor. Since you are uncertain of the future, use only 30% to 40% of your available credit card balance every month incase you fall sick and is unable to pay up.
• Warning Sign #3: misusing home equity loans.
Fact: your home equity loan should only go to home improvements. If you want to use it for any other ways ensure that you can comfortably repay it.
• Warning Sign # 4: you have no emergency fund.
Fact: 43% of Americans have savings less than $1,000. Save up for emergencies.
• Warning Sign #5: you pay only the minimum balance of your credit.
Fact: it will take you about 20 years to clear your credit card balance while paying only the minimum amount. Pay a little more so that you extinguish the debt faster.
• Warning Sign #6: you Co-sign a loan for other people.
Fact: you are responsible for repaying the loan that you cosign in full. Be careful while agreeing to cosign loans as he could drive you to bankruptcy.
• Warning Sign # 7: you suffer repossession, Tax lien or foreclosure of your collateral.
Fact: once you star losing assets, you are no longer in control of your finances.
• Warning Sign #8: you have very big student loans.
Fact: as innocent as may look, it has driven many people to bankruptcy.
Follow these eight ways to avoid bankruptcy:
1. Don’t be an impulse buyer. Use a buying list and budget.
2. Use cash as much as you can.
3. Destroy mail solicitations for credit cards.
4. Budget the money you have well.
5. Buy the house tat you can comfortably make payments for.
6. Get adequate life, property and medical cover.
7. Make speculative investments wisely.
8. Don’t cosign a loan with people you don’t trust to repay.