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When should I seek legal advice for my debts?

If you are deeply in debt, the feelings of fear, guilt and failure can quickly take over. Unfortunately, when this happens, it is easy to become paralyzed by your feelings and do nothing to solve your problem, even though this is the time that you need help the most.

If you are in this situation, the good news is that you are not beyond all help. Bankruptcy attorneys deal with these issues every day and can lend their expertise to get you out of the hole you find yourself in. If you are experiencing any of the following signs, it could mean that it is time for you to seek professional guidance.

You are being harassed by creditors: In many cases, your creditors will turn your debt over to a collection agency when it is clear that you are delaying paying your debts. Because of this, if you are regularly receiving calls from collection agencies, it is a sure sign that your financial situation is spiraling out of control.

You are making the minimum payments on your credit cards: If you can only afford to make the minimum payments on your credit card, you are paying only an infinitesimal amount towards the principal with each payment. Since most credit cards carry double-digit interest rates, your debt can quickly grow and become unmanageable.

You are being garnished or are threatened with the loss of your property: Since wage garnishment involves your employer's knowledge and cooperation, it may lead to the loss of your job in certain circumstances (especially if there are multiple creditors garnishing your wages). Additionally, if you are being threatened with foreclosure or repossession of your car, there is a serious risk of losing some of your most important assets. However, if you act quickly to seek professional help, all of this can be avoided most of the time.

You are considering raiding your retirement accounts: Borrowing from your future to pay debts in the present can have serious repercussions such as financial penalties for early withdrawals and income tax consequences. In some cases, doing it can derail your retirement plans altogether, as early withdrawals will cause you to miss out on years of compound growth of your assets. Fortunately, you can keep your retirement accounts intact if you file bankruptcy.

The bottom line is that doing nothing to deal with your debts is a foolish decision in most cases, as the problem will most likely only get worse and harder to deal with. You can take the first step to remedying your situation by speaking with an experienced bankruptcy attorney as early in the process as possible when your options are the most numerous. An attorney can advise you of your options and recommend the best way for you to get back on your feet.

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