{"id":370,"date":"2013-05-07T12:08:08","date_gmt":"2013-05-07T16:08:08","guid":{"rendered":"http:\/\/thegraftonfirm.com\/?p=370"},"modified":"2022-02-14T04:24:37","modified_gmt":"2022-02-14T09:24:37","slug":"debt-warning-signs-baltimore","status":"publish","type":"post","link":"https:\/\/thegraftonfirm.com\/bankruptcy\/debt-warning-signs-baltimore","title":{"rendered":"Debt Warning Signs &#8211; Baltimore Bankruptcy Attorney"},"content":{"rendered":"<p>As a Baltimore Bankruptcy Attorney, I get asked regularly how much debt is needed to file bankruptcy. \u00a0It is a question without an answer, unfortunately. \u00a0You see, it&#8217;s not about the amount of debt, it&#8217;s about your ability to deal with that debt and the ramifications to you of not seeking protection. \u00a0In other words, that number is going to be different for everyone. \u00a0Even two people with the exact same income and the exact same amount of debt may have a different number. \u00a0What many people fail to understand, even people who are involved in bankruptcies professionally, is that it&#8217;s not about the amount of debt, it&#8217;s about the need for relief. \u00a0It&#8217;s about having the very fundamental necessities of life threatened by your debt.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Bankruptcy_isnt_a_dirty_word\"><\/span>Bankruptcy isn&#8217;t a dirty word!<span class=\"ez-toc-section-end\"><\/span><\/h2><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-662c59b5a06c1\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-662c59b5a06c1\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/thegraftonfirm.com\/bankruptcy\/debt-warning-signs-baltimore\/#Bankruptcy_isnt_a_dirty_word\" title=\"Bankruptcy isn&#8217;t a dirty word!\">Bankruptcy isn&#8217;t a dirty word!<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/thegraftonfirm.com\/bankruptcy\/debt-warning-signs-baltimore\/#Can_Debt_be_avoided\" title=\"Can Debt be avoided?\">Can Debt be avoided?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/thegraftonfirm.com\/bankruptcy\/debt-warning-signs-baltimore\/#6_No_Emergency_Fund\" title=\"6. \u00a0No Emergency Fund\">6. \u00a0No Emergency Fund<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/thegraftonfirm.com\/bankruptcy\/debt-warning-signs-baltimore\/#5_Housing_Costs_as_Percentage_of_Income_is_More_than_25\" title=\"5. \u00a0Housing Costs as Percentage of Income is More than 25%\">5. \u00a0Housing Costs as Percentage of Income is More than 25%<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/thegraftonfirm.com\/bankruptcy\/debt-warning-signs-baltimore\/#4_Your_Credit_Card_Balances_Continue_to_Rise\" title=\"4. \u00a0Your Credit Card Balances Continue to Rise\">4. \u00a0Your Credit Card Balances Continue to Rise<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/thegraftonfirm.com\/bankruptcy\/debt-warning-signs-baltimore\/#3_You_Are_Forced_to_Use_Credit_Cards_to_Make_Up_a_Portion_of_Your_Budget\" title=\"3. \u00a0You Are Forced to Use Credit Cards to Make Up a Portion of Your Budget.\">3. \u00a0You Are Forced to Use Credit Cards to Make Up a Portion of Your Budget.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/thegraftonfirm.com\/bankruptcy\/debt-warning-signs-baltimore\/#2_You_Are_Regularly_Forced_to_Pay_One_Credit_Card_with_Another_ie_Balance_Transfers\" title=\"2. \u00a0You Are Regularly Forced to Pay One Credit Card with Another (i.e., Balance Transfers)\">2. \u00a0You Are Regularly Forced to Pay One Credit Card with Another (i.e., Balance Transfers)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/thegraftonfirm.com\/bankruptcy\/debt-warning-signs-baltimore\/#1_You_Regularly_Make_Payments_Late_or_Not_At_All\" title=\"1. \u00a0You Regularly Make Payments Late or Not At All\">1. \u00a0You Regularly Make Payments Late or Not At All<\/a><\/li><\/ul><\/nav><\/div>\n\n<p>Before I go much further, let me get out my soap box for a moment. \u00a0Too many people in this country believe that everyone who filed for bankruptcy are deadbeats or brought their situations on themselves. \u00a0For the vast majority, however, they did what everyone else was doing, financing parts of their lifestyle and were then hit by an unforeseen event that threatened their ability to provide the essentials for their families. \u00a0For a large minority that event may be a serious illness or permanent disability.<\/p>\n<p>It could be recession and job loss and the inability to find a job that restores you to a wage necessary to meet the obligations you&#8217;d assumed when times were better and wages were higher. \u00a0Are some of these emergency situations avoidable. \u00a0Sure. \u00a0Some are. \u00a0I cast no stones, however. \u00a0There are things you can do to insulate yourself from calamity, insurance products to assist if you are seriously ill and cannot work, or disability policies that can restore part of your wage if you are permanently or seriously injured for a long period of time. \u00a0These things cost money, however and for many people are not economically justifiable.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Can_Debt_be_avoided\"><\/span>Can Debt be avoided?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Should more people save money and rely on savings instead of credit. \u00a0Absolutely. \u00a0Yet our entire culture revolves around consumption. \u00a0We are marketed to and pressured from all sides to spend spend spend.<\/p>\n<p>The President once said it was our patriotic duty to spend to restore the economy. \u00a0Putting aside the debate on macro-economic policy decisions, I would just state that I disagree. \u00a0All these pressures discourage savings, encourage consumption, and put us all at greater risk of needing my services one day.<\/p>\n<p>So, back to the topic at hand. \u00a0What are some of the warning signs that you are getting close to needing my services? \u00a0And how bad are each of them. \u00a0We&#8217;ll start from the least alarming and move up from there.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"6_No_Emergency_Fund\"><\/span>6. \u00a0No Emergency Fund<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Many debt experts recommend having enough money in the bank to pay your bills for at least 3 months in the event of job loss or illness. \u00a0This gives you time to hopefully regain employment and doesn&#8217;t leave you dependent on financing your necessities while you are out of work. \u00a0If you do not have an emergency fund, start one now. \u00a0This may require going on a restrictive budget. \u00a0If you don&#8217;t have a budget, read this article on <a title=\"Create a Family Budget\" href=\"https:\/\/thegraftonfirm.com\/how-to-never-need-our-debt-services\/creating-a-family-budget\">creating a family spending plan<\/a>.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"5_Housing_Costs_as_Percentage_of_Income_is_More_than_25\"><\/span>5. \u00a0Housing Costs as Percentage of Income is More than 25%<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The percentage of your income that you spend on sheltering yourself and your family is no sure measure that you&#8217;re in danger of needing to hire a bankruptcy attorney, but as one of the largest and most immobile line items on your family budget, housing costs do give us some ideas as to the riskiness of your living situation. \u00a0During the housing bubble many people found themselves in homes who&#8217;s mortgage payments were 30-45% of their salaries. \u00a0Many of these homes are now <a href=\"https:\/\/thegraftonfirm.com\/bankruptcy-chapter-7-chapter-13-foreclosure-repossession\">foreclosed<\/a>. \u00a0If you are in this situation with a mortgage or if you rent, look for ways to reduce the monthly expense. \u00a0Refi options are very popular right now, and interest rates are at historic lows. \u00a0If you rent, look to relocate or renegotiate your rent.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"4_Your_Credit_Card_Balances_Continue_to_Rise\"><\/span>4. \u00a0Your Credit Card Balances Continue to Rise<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>If you&#8217;re not in an emergency situation and yet your credit card balances continue to rise month after month, then you&#8217;re slipping into the danger zone. \u00a0This may mean that you need to reassess your budget priorities, review your spending habits, check for illicit use, or more aggressively pay down your outstanding debts. \u00a0It is understandable that in a brief period of unemployment or after a major expense arises unexpectedly, that you may have to incur some additional debt, especially if you don&#8217;t have an emergency fund. \u00a0When these balances are rising absent these circumstances, it is a sign that your spending is not controlled.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"3_You_Are_Forced_to_Use_Credit_Cards_to_Make_Up_a_Portion_of_Your_Budget\"><\/span>3. \u00a0You Are Forced to Use Credit Cards to Make Up a Portion of Your Budget.<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>So, the first of the month rolls around and you&#8217;ve paid your rent, your utilities, and all of your credit card bills. \u00a0The problem is that you&#8217;ve got $600 left in expenses budgeted for the month and $400 in cash. \u00a0No problem, right? \u00a0$200 on the credit card. \u00a0Wrong. \u00a0This is a serious warning sign. \u00a0This means that the payments you&#8217;re making on your credit card are eating into your budget more than they should. \u00a0This calls for either aggressively reducing your credit card balances and\/or reducing your monthly expenses. \u00a0Many people are actually in this very dangerous situation and do not even realize it. \u00a0They think that it&#8217;s no problem, because they&#8217;re paying $250 to a credit card and only using it for $200. \u00a0The problem is that they may be paying more in interest than the difference between the two.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"2_You_Are_Regularly_Forced_to_Pay_One_Credit_Card_with_Another_ie_Balance_Transfers\"><\/span>2. \u00a0You Are Regularly Forced to Pay One Credit Card with Another (i.e., Balance Transfers)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>This is serious. \u00a0This means that you are probably Insolvent. \u00a0Meaning, you cannot pay your bills as they become due. \u00a0As some of my clients put it, you&#8217;re robbing Peter to pay Paul. \u00a0Your overall debt load at this point is starting to increase dramatically. \u00a0Maybe you can resolve this with serious budgetary constraints, but if this situation comes upon you unawares, then you may be locked into long term mortgages or leases that could inhibit the necessary downsizing, cost reductions you need to make. \u00a0This is a classic sign that bankruptcy may be the best option for you.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"1_You_Regularly_Make_Payments_Late_or_Not_At_All\"><\/span>1. \u00a0You Regularly Make Payments Late or Not At All<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>This is where most of my clients are. \u00a0Some come to me recognizing that they are in stages 4, 3, or 2 and proactively take charge of this situation, but when you&#8217;re in this final stage, it requires some hard truths. \u00a0Hardest of those is that Bankruptcy may be the BEST option for you at this time. \u00a0We will happily review your situation and see if bankruptcy can be avoided, but you need to be ready to accept that avoiding bankruptcy may be more difficult and costly than actually filing <a href=\"https:\/\/thegraftonfirm.com\/bankruptcy-chapter-7-chapter-13-foreclosure-repossession\">bankruptc<\/a>y.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>As a Baltimore Bankruptcy Attorney, I get asked regularly how much debt is needed to file bankruptcy. \u00a0It is a question without an answer, unfortunately. \u00a0You see, it&#8217;s not about the amount of debt, it&#8217;s about your ability to deal with that debt and the ramifications to you of not seeking protection. \u00a0In other words, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":2139,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[57,66],"tags":[],"_links":{"self":[{"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/posts\/370"}],"collection":[{"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/comments?post=370"}],"version-history":[{"count":1,"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/posts\/370\/revisions"}],"predecessor-version":[{"id":3274,"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/posts\/370\/revisions\/3274"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/media\/2139"}],"wp:attachment":[{"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/media?parent=370"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/categories?post=370"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/tags?post=370"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}