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3 Warning Signs That Your Financial Life is Out of Control

Couple stressed out and holding up a help sign

Your financial life is important to your overall security and peace of mind. When your financial life becomes out of control, there always be warning signs. These warning signs may be the signal that you may need more powerful debt relief options such as bankruptcy.

Warning sign #1: Living paycheck to paycheck and it’s not enough

Life becomes difficult enough when you are living paycheck to paycheck.  When you are no longer able to live paycheck to paycheck, it is a sign that your financial life is out of control.  If you could no longer budget all of your expenses within the framework of your paycheck and income, you need to take drastic action.  You need to look into options such as reducing your overall expenses or even filing for bankruptcy.

Warning Sign #2: Spending more than 30% of your income on servicing debt

Another warning sign that your financial life is out of control is spending more than 30% of your income on servicing debt.  If you are paying more than 30% of your income towards credit cards or other high interest loans, your financial situation is likely becoming out-of-control.  

Using a large amount of your income to service your debts can become a vicious cycle.  Many times the debts are never significantly paid down.  Usually your debt totals only end up increasing.  In order to break this high-debt cycle, you may need to drastically change your financial set up.  You may also have to file for bankruptcy.

Warning Sign #3: Everything You Own is “Financed”

If everything in your possession is financed, your financial life is likely way out of control.  Mortgages and car loans are bad enough.   If you even have other financed items on the table, you are likely going down a very bad road financially.   This is because you are overextended.  Very little of what you own was paid for with savings or cash.   Such situations can quickly develop to where the payments to service the loans can no longer be afforded.  In order to get rid of the debt obligations, you may need to sell some of the items or pay off some of the loans.  If the situation is too severe, you may need to file for bankruptcy.

Speeding Up Your Bankruptcy Process

When people are overwhelmed with the debt, they many times want to get bankruptcy relief quickly.  It is possible to speed up your bankruptcy proceeding.   If you follow the suggestions below, then your bankruptcy proceeding will be completed at the fastest speed possible.

Get Your Required Documents Together Quickly

The bankruptcy court requires documents.  These documents will be turned into the bankruptcy court and the bankruptcy trustee in order to complete your case. One of the largest holdups when filing bankruptcy comes from not quickly providing the required documents. These documents are also required for the drafting of your bankruptcy petition.  

These documents are simple, consisting of a few years tax returns, some pay information, and the providing of bank statements.  In order to speed up your bankruptcy process, make a plan to provide your fees and required documents for your case immediately after speaking to your bankruptcy attorney.

Take your class as early as possible

Another way to speed up the bankruptcy process is to take your class as early as possible. Before you file for bankruptcy, you are required to take a one hour credit counseling course. If you desire to speed up your bankruptcy process, you should probably take this course immediately after speaking to your bankruptcy attorney.

Follow all requests of your attorney and the bankruptcy trustee as quickly as possible

The final resolution and closing of a bankruptcy case can also be held up by refusing to timely comply with the requests of your attorney or bankruptcy trustee.  Although the term “request” is used here, the reality behind any such request is that the desired items or actions are a non-negotiable case requirement. Your attorney and bankruptcy trustee only desire to complete their duties.  They will not ask for non-necessary documentation.  By not complying with these request timely, you will be holding up the bankruptcy process.

Ways to Plan for Medical Emergencies After Filing for Bankruptcy

Ways to Plan For Medical Emergencies After Bankruptcy

Medical emergencies can create large, unexpected debts.  Sometimes medical debts can even cause bankruptcy.  It is important to plan for medical emergencies after filing for bankruptcy.   Unexpected medical bills can be controllable by the following planning tips.

Planning Tip #1: Acquire Medical Insurance

Medical insurance is the most powerful way to plan for unexpected medical costs. Although traditional medical insurance can be difficult to afford, nothing compares to it’s ability to protect you from unexpected medical costs.  Medical insurance may be possible with employer and local programs and should be pursued if at all possible.

Planning Tip #2: Medical Costs Sharing Plans and Other Forms of Protection

Medical cost sharing programs are becoming more widespread throughout the United States as a response to increasing insurance costs.  These programs require monthly contributions and operate in function very similar to medical insurance.   The cost savings can be enormous.

Also, there are many medical discount plans for medical and prescription costs.   Whatever program you enter, make sure to investigate the past reliability of the program.  Personal referrals and research may be required to determine if the program is sufficient for your needs and worthwhile.   Some programs may prove to be a cost-effective alternative to traditional insurance in some cases.   

Planning Tip #3: Medical Savings Account

If you have a medical insurance or similar program that requires a annual deductible, you may be qualified to use a medical savings account.   These special medical savings accounts offer two benefits.  First, automatic contributions to the account provide an easy system to save for unexpected medical costs.  Secondly, the taxing authorities will require income tax to be paid on amounts contributed to the account.  Talk to your employer or a tax professional to see if you qualify for a medical savings account.

The Best Tip Is Simple: Always Plan for Unexpected Medical Bills

Life is unexpected.  Large medical bills can come on within a very short period of time.  They can damage your financial life quickly if you do not have a plan.  Instead of “hoping for the best,” responsible financial planning always requires making a plan for medical bills.  The best tip is simply to take medical cost seriously.  If you have a plan, then it will be much more difficult for a series of medical bills to destroy your financial life.  Having a plan for medical bills can also  be an important step for avoiding the future possibility of bankruptcy.

Tips to Stop Collection Calls

Need to Stop Collection Calls?

Collection calls can be horrible.  Although some collectors are polite and understanding, many debt collectors are aggressive and demanding.  Debt collection calls can certainly add stress to an already stressful debt situation.  Here are a few tips for stopping collection calls.

Tell Collectors to Only Communicate with You Through Your Attorney

Talk to a bankruptcy or debt relief attorney.  Afterwards, you may want to demand all future collection calls to only go through your attorney’s office. This will give you time to either settle your debts or file for bankruptcy.  If you cannot settle the debt or file for bankruptcy within six months, then your creditors may continue to contact you.

Your creditor will only call your bankruptcy attorney usually once or twice to verify representation.  The same creditor may call you 20 or 30 times to keep pressuring you to make payments on the debt.   Follow the instructions of your attorney on how to deal with collection calls.  You cannot trust the information being given you over the phone by debt collectors.

Tell Collectors that They No Longer Authorized to Call You at Work

Under the Fair Debt Collection Practices Act, you may be able to prevent certain creditors from contacting you at work. If you receive a collection call at work, you need to tell the creditor that they are no longer authorized to contact you at work and they need to only contact you at home or directly via cell phone.  Although this does not apply to collection attempts being made by the original creditor, generally all collection agencies will be bound by this request and will cease attempting to contact you at your workplace.

File For Bankruptcy – All Collection Calls Will Stop

The most powerful method of stopping collection calls is to file for bankruptcy.   When you file for bankruptcy, an invisible shield call the “automatic stay” protects you from any further communication with your creditors.  This “automatic stay” will almost instantly stop a collection calls.

Sometimes creditors mistakenly call you after you file for bankruptcy.  If you receive such as call, you need to give the creditor your bankruptcy case number information and demand that they do not contact you in the future.  If they call again, instruct them to contact your bankruptcy attorney.  Make sure to document the inappropriate contact.  If the same creditor continues to contact you, give all the contact information to your bankruptcy attorney.   Your bankruptcy attorney will contact the creditor to make them stop.  Sometimes your bankruptcy attorney may even sue the creditor in bankruptcy court if the contact was sufficiently inappropriate and grievous.

Can One Spouse File for Bankruptcy?

Image illustrating bankruptcy exemptions

Sometimes a married couple may not be equally burdened with debts.  Most or all of the marital debts may only be in one spouse’s name in some situations.  Although married couples usually file together in bankruptcy, sometimes it can be advantageous for only one spouse to file for bankruptcy.

How Much Debt Can Decide Who Files 

If one spouse has much less debt, then you may want to consider whether that spouse needs to file for bankruptcy.  If it is possible to get the other spouse out of debt within 1 to 2 years, then it be advantageous for that spouse to stay out of the bankruptcy.  However, bankruptcy is the perfect time to deal with debts in their entirety.  It does not cost additional amounts usually if you add both spouses onto a single bankruptcy. Careful consideration with a bankruptcy attorney should always take place if a debt-laden spouse desires to not file bankruptcy.

Medical Debts May Require Special Consideration in Indiana

Medical debts can sometimes be collectible against both spouses in Indiana.  Even if only one spouse is listed on the debt, medical bills are sometimes collectible against the other spouse. If only one spouse files for bankruptcy, it is possible that medical creditors could attend collection on the other spouse even after the bankruptcy.  

The medical debts are required to have occurred during the marriage in order to potentially collect against the spouse.  If the medical debts were incurred before the marriage, then it is highly unlikely in Indiana that the current spouse will be found liable for collection.  Also, collection against spouses may not always occur with every medical debt.   Many times the medical debts are simply written off after the notice of the bankruptcy without any further attempt to collect against a potentially liable spouse.

Ultimately Seek Your Bankruptcy Attorney’s Advice

Your attorney will likely know better than anybody else whether both spouses should file for bankruptcy.  Your attorney will likely be familiar with the difficulties of repaying debt.  Upon request, your attorney can review the advantages and disadvantage of having only one spouse file for bankruptcy.