Bankruptcy is a legal process designed to help individuals who can no longer pay their debts. It can provide relief from most unsecured debts and give you a fresh financial start. In the United States, bankruptcy generally takes one of two forms for individuals:
- Voluntary bankruptcy, also known as a debtor’s petition, where you file for bankruptcy yourself.
- Involuntary bankruptcy, also known as a creditor’s petition, where a creditor petitions the court to declare you bankrupt.
Before taking this important legal step, it’s essential to:
- Seek professional legal advice
- Understand what bankruptcy involves
- Evaluate all your options
Signs You May Need to Consider Bankruptcy
If you’re overwhelmed with debt and unsure of your options, bankruptcy may be worth exploring. The Lawyer Referral Service of Central Texas (LRS) recommends speaking with an experienced bankruptcy attorney in Austin before filing. While the idea of bankruptcy may feel intimidating, it can be a strategic solution to relieve unmanageable debt and begin rebuilding.
Here are five common signs that you may want to discuss bankruptcy with a lawyer:
1. You’re Relying on Credit Cards for Basic Necessities
If you’ve started using credit cards to pay for everyday items like groceries, gas, and utilities because you’re out of cash, it may indicate deeper financial trouble. This pattern can quickly spiral as interest accumulates, making it even harder to catch up. An Austin bankruptcy attorney can help you determine whether filing is the best course of action.
2. Your Wages Are Being Garnished
When creditors secure a court order to garnish your wages, a portion of your paycheck is sent directly to them before you even see it. This can significantly reduce your take-home pay and make it harder to pay other bills. Filing for bankruptcy may stop wage garnishment and provide immediate relief under the automatic stay.
3. You Consistently Spend More Than You Earn
Even if you’ve already cut back on spending, consistently falling short each month and dipping into savings just to cover bills is a sign of financial instability. Over time, interest on debts can outpace any efforts to pay them down. If your income is no longer enough to support your basic needs, a bankruptcy lawyer can help you explore your options.
4. You’re Receiving Frequent Calls from Debt Collectors
Persistent phone calls from creditors or debt collection agencies can be emotionally exhausting and stressful. These calls typically begin when you’ve missed payments or defaulted on debts. Filing for bankruptcy can legally stop collection efforts and give you time to reorganize your finances.
5. You’re Behind on Major Bills
If you’re routinely late on rent, your car payment, mortgage, or utility bills—or have skipped payments entirely—it may be time to consider bankruptcy. Delaying action can worsen the situation, leading to repossession, foreclosure, or service shut-offs. A qualified attorney can help you decide whether filing will protect your assets and stop creditor actions.
Call Us or Request a Referral Online
If any of these signs sound familiar, it may be time to speak with a bankruptcy attorney.
Contact the Austin Lawyer Referral Service today to connect with a qualified bankruptcy lawyer in Austin or the surrounding Central Texas area. We offer a free 30-minute consultation to help you better understand your legal options. Call us at 512-472-8303 or toll-free at 866-303-8303, or submit a referral request online.
We’re here to help.
