Filing bankruptcy is a huge deal for most people. This is a time when you should do some thinking before you decide to file. On the other hand, waiting too long to file when your financial issues are pressing in on you could be unwise. Read on and find out more about the financial red flags to watch for.

Missed Payments – No matter how smart you are with your money; you may be unable to meet the minimum payment on a credit card or other types of debts. That can mean late charges, penalties, and higher interest costs, which only adds to your financial problems.

Juggling Bills – When there is too little money available to pay a bill, you might find yourself prioritizing your bills. This way of paying bills probably has more to do with the importance of the bill than of available funds. It's a no-brainer, for instance, to pay an electric bill instead of a credit card bill when things are tight. That can begin to happen time after time, month after month.

Using Credit Unwisely – If your income level is not in sync with your outflow, you may need to pay a bill or purchase a need using available credit. This means using the bit of available credit on your Visa card to pay for gas to get to work or for groceries. It also means that your debt load probably exceeds your income so much that you are not likely to get caught up any time soon.

Debt Collection Actions – Creditors will turn your account over to a collection agency sooner or later. When you still cannot pay your obligations, you could face a court case. Likely, you won't win the case and then further punitive actions will follow. Your wages can be garnished, which means money will be removed from your paycheck before you get it. Other punitive actions involve the loss of a vehicle when it's repossessed and the loss of a home when it's foreclosed upon.

Don't Ignore the Red Flags

Even one or two of the above red flags are a sign that you need to act. Your financial situation will not magically improve unless you win the lottery or come into an inheritance. Bankruptcy is a big decision but sometimes it's the only thing that makes sense.

A chapter 7 filing will put an immediate stop to collection actions and what's more, you will have more money to spend on living expenses when you don't have to pay those other bills. Speak to a bankruptcy lawyer to find out more.