Managing finances isn’t easy, and sometimes it can get a bit overwhelming to bear. After all, not only do you have bills and loans to pay, you may also have things such as insurance, savings, and other expenses you have to earn for. When these pile up, sometimes you don’t even notice that you’re on your way to an impending personal bankruptcy. Knowing the red flags for an impending personal bankruptcy is important, especially when it comes to ensuring your financial stability.

According to Debt, the number of bankruptcy cases in the United States has been decreasing, at least from 1980 to 2005. In fact, in the latter year, more than 2-million bankruptcy cases were reported, which means of 55 households in the country, one of them may be opting to file for bankruptcy. While these statistics are hard to gauge given how states have different bankruptcy policies, these numbers do prove that bankruptcy is a serious problem that you have to be always cautious of. Here are red flags for an impending personal bankruptcy:

  • Are you starting to miss payments? While missing payments by accident can be forgiven, if you’re starting to consciously miss payments because of lack of savings or the lack of the funding to pay for them, then you might have a debt problem you might not be able to solve. Obligations to debt and loans such as auto loans, credit card payments, medical bills, student loans, and a mortgage are extremely important aspects of your financial stability. Failing to pay them means you might be in trouble.
  • Are you having trouble qualifying for debt management? Sometimes, if you miss payments regularly or if you think you might not be able to cope with all the things you have to pay for, you can try applying for a debt management plan in order to consolidate debt. If this too is becoming an issue for you, then your creditors might not be seeing good numbers in your credit report. If this continues and your payments overwhelm you, then you might be in for a bad ride towards bankruptcy.
  • Are you getting demands from creditors? If your debt becomes too high to the point that creditors are starting to call you for repayments, then you might be in trouble. These normally occur a month or two after you miss a payment, and you may even get notices of past-due accounts and see them in your credit report. This is not only bad news for your credit, but mean you might be on your way to bankruptcy as well.
  • Are you unable to recover from a personal setback? If you had to spend money for something such as an accident or an urgent bill and you haven’t been able to balance the numbers out after a considerable amount of time, then you might be in big trouble as well. Try to see if your expenses now are for your current needs or if there are still things you have to spend for that should’ve been settled for a long time.


Do remember that even if personal bankruptcy might be something you’re heading towards right now, it’s something you can still avoid. It’s important to remember that sometimes it takes a bit of time, effort, and a lot of patience to work your ways towards recovering from these financial ailments, but it is possible to tackle the problem head on. You may also click here to get yourself some legal help on the matter.