There are many triggers a person may have to look for when determining when it’s time to file for bankruptcy. However, it is important to make sure people don’t overreact to current financial issues. The simple fact is that filing for bankruptcy isn’t something that should be the first response to financial issues, but there are times where ignoring the warning signs may lead to dire circumstances before a person files for bankruptcy.

Don’t Overreact

Small financial issues where a person or couple may be experiencing difficulty paying a bill or two is certainly not a reason to file for bankruptcy. These are things that can usually be worked out with a simple phone call to the creditor whose bill a person is having difficulty paying. Even if it’s more than one bill, many times, letting a creditor know about the financial difficulties being experienced is an opportunity for the individual as well as the creditor to work out some sort of agreement that is best for everybody.

When the Situation is Dire

If a person is being threatened with legal action because they can’t afford to pay a particular bill, or they are paying existing debts on credit cards or having to take out short-term loans, this is typically an indication that it is time to file for bankruptcy. In addition, if a person has fallen behind on their mortgage payments and a bank is looking to foreclose, filing for bankruptcy, while not eliminating the foreclosure process, can halt foreclosure proceedings. This can help the homeowner to either catch up with missing payments or they can use the bankruptcy filing as a launching pad to potentially renegotiate their mortgage agreement.

People tend to panic when it comes to financial issues and this often results in overreaction. While this overreaction should be avoided, it is entirely understandable. The stress that financial issues can cause can affect a person’s peace of mind, can interrupt their sleeping habits, can negatively impact their personal and romantic relationships as well as have a huge negative impact on a person’s health. That’s why it’s important to know when it’s time to speak to a creditor about a payment problem and when it’s time to look for legal solutions such as bankruptcy. To get more information on the timing of bankruptcy, an article found at may be extremely helpful.