What are the Common Warning Signs that May Lead to Bankruptcy in Arizona?

Eric Ollason, our bankruptcy attorney in Tucson, Arizona, understands that 2020 was an unprecedented and difficult year physically, emotionally, financially, or possibly some combination of all three, for nearly everyone in Pima County.

As we move into 2021, we are all taking things we learned from the previous year with us, hopefully for the better.

For instance, most of us know how to avoid physical injury, including the potential harm of the COVID-19 virus. We may also know how to identify when our mental health needs attention, including taking time to address stress and anxiety, so we can move forward with confidence. Last year also taught us, quickly and harshly, that financial trouble may have been closer than we thought.

Here are a few tips that may help you address financial warning signs, how to get ahead of them, and your potential options for starting anew.

Do You Consistently Spend More Than You Earn?

Spending more than you earn will immediately lead to financial trouble for one obvious reason: You do not have the money to go on like this.

There are many, many reasons why your expenditures may outweigh your income at any given time, including emergency needs and surprise expenses like your car breaking down or a sudden job loss.

However, when you are consistently spending more money than you make — month after month — the excess spending must go somewhere, and that place is typically onto a credit card or a forced short-term loan to make up the difference.

Unfortunately, both of those financial bailout options accrue interest, often at a very high rate.

This makes it harder to pay off the initial amount and deepens your debt very quickly.

The solution? Outline your net income and your total expenses to reveal the real amount you have left each week or month, depending on how you are paid.

If that is a negative number, you are spending more than you make and it is time to determine where you can cut back.

Consider cutting expenses, like dining out, monthly subscription services, or unnecessary purchases that are putting your accounts in the red. If it is possible to trim your expenses to necessities like rent, car payments, utilities, and insurance, now is the time to start.

Are You Delaying Essential Expenditures Due to Lack of Funds?

While it may be easier to identify physical and emotional needs than it is to face the reality of financial trouble, they all work in tandem when it comes to your overall well-being.

When you are in financial trouble, you may delay medical treatment, prescription refills, dental visits, getting new eyeglasses or contacts, vehicle maintenance needs, or even addressing necessary household upkeep.

The bad news is, these essential expenditures are typically the first to go when you cannot afford them. The worse news is, each need is only going to become more severe the longer you wait.

When you do not have the funds to afford these necessities, it may be a sign you are spending too much elsewhere. It is time to outline your income versus expenses again, to determine where your money is going, so you can get ahead of the financial curve.

Are You Frequently Worried or Stressed About Money?

Money trouble is one of the leading causes of stress and anxiety in individuals across all income brackets in the United States.

Physically, stress can lead to high blood pressure, heart disease, abnormal heart rhythms, strokes, and even heart attacks.

Psychologically, financial trouble can lead to depression, anxiety, and behavioral changes.

If you are overwhelmed by your financial trouble, or have started receiving harassing phone calls, collection notices, or are worried you may lose your home or car, you may already be eligible to file for bankruptcy in Arizona.

Free Initial Consultation

If you would like to learn more about your bankruptcy options, contact our experienced bankruptcy attorney in Tucson, Eric Ollason, to learn more about your rights and options to start fresh by calling (520) 791-2707 today to schedule a free consultation.