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HEADING OFF BANKRUPTCY - THE WARNING SIGNS

Per About.com below are the eight warning signs:

Bankruptcy Warning Sign #1: No health insurance or inadequate coverage. One major illness can lead you into financial despair. So if you can afford to pay for medical insurance please do so. It can happen to you !

Bankruptcy Warning Sign #2: Maxing out on your credit cards or charging more than you can pay off each month. A good rule of thumb is to use no more than 30% to 40% of your available credit at any one time. Does you fiancee really need that $20,000 engagement ring?

Bankruptcy Warning Sign #3: Over-using home equity loans. Don't use that home equity loan to pay for a sports car.

Bankruptcy Warning Sign # 4: No emergency fund. Don't live from paycheck to paycheck. Even if you only save $50 dollars a month work on building that next egg. One day it may come in handy. Its disturbing that 43% of American households have less than $1,000 saved.

Bankruptcy Warning Sign #5: Paying the minimum balance on your credit cards. If you can only afford to pay the minimum consider doing without little luxuries. Live within your means. Don't try to live like a millionaire.

Bankruptcy Warning Sign #6: Co-signing a loan for someone else. Be wary that the person may default then you are in financial trouble as the debt becomes yours.

Bankruptcy Warning Sign # 7: Tax lien or foreclosure on your home, or repossession of a car or other item you failed to make timely payments on.

Bankruptcy Warning Sign #8: Borrowing too much on student loans.

Learn to recognize the signs that you are carrying too much debt - making only the minimum payments on your charge accounts each month, charging essentials like food and gas, or nearing the credit limit on your credit cards. If these situations apply to you, develop a budget and a debt repayment plan.

If you plan to file for bankruptcy, try to pay the balance on one major card. A credit card that is paid off before you file for bankruptcy will be exempt from the procedures and can then be used ti help you reestablish credit.

Before filing for bankruptcy get a good lawyer. A lawyer can help you understand the different types of individual bankruptcy and determine the most advantageous one for you.

Learn more about this author, Frank Donatone.
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