Five Signs You're Headed for Bankruptcy

Crabtownboy · Oct 19, 2010

I hope this does not apply to anyone on the board ..............

Here are a few clues that you may be headed off a financial cliff:

You’re using credit cards to pay for critical items like housing or groceries – Credit cards aren’t meant to pay ongoing household bills, especially if you have any outstanding balance. If you’re using a card to pay your mortgage each month, or are down at the Safeway (Stock Quote: SWY) sliding your card through the checkout line scanner for food and supplies every week, you may be headed down a slippery path.

You have no health insurance – Full-blown health reform doesn’t kick in until 2014 – that is, if the courts allow it. Until then, if you don’t have health insurance you’re just asking for financial trouble. Studies show that medical bills are a common trigger for bankruptcy proceedings. If you don’t have insurance, and you suffer a major accident or illness, that’s a surefire way to go broke.

Abusing a home equity line of credit – This one is hard to accomplish these days, as banks have really tightened the reins on home equity loans. But if you fall behind on your home equity payments, the bank treats it like you’ve fallen behind on your mortgage – and it could try to foreclose on your home. It’s imperative that you keep up to date on your home equity payments – banks and mortgage lenders are watching those payments very closely.

Living paycheck-to-paycheck: Another sign that you’re in danger of sliding into bankruptcy is not having any savings in your financial picture. This tees you up for serious financial trouble if you lose your job or suffer a debilitating illness.

Co-signing loans: Never co-sign a loan for anyone – even a family member. If the borrower forecloses on the loan, the bank will come to you looking for payment in full. If you can’t make good on the loan, then it’s your neck on the chopping block. Co-signed loans are another common theme in bankruptcy proceedings.

http://www.newsweek.com/2010/10/18/five-signs-you-re-headed-for-bankruptcy.html
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Steven2006 · Oct 20, 2010

"Abusing a home equity line of credit"

I am not sure what they mean exactly by abusing a home equity line of credit since they didn't explain how they meant it. However using a line of credit as an alternative can be wise in many cases since the interest paid is tax deductible where most other forms of interest paid often wouldn't be.

Five Signs You're Headed for Bankruptcy

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Five Signs You're Headed for Bankruptcy

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