Welcome to The Times in Plain English   Click to listen highlighted text! Welcome to The Times in Plain English

Are You Heading Toward Bankruptcy?

August 10, 2014
Plain English Version


If you cannot pay your debts, federal law allows you to declare bankruptcy. Hundreds of thousands of Americans declared bankruptcy during the Great Recession. Many fewer are doing so today.

However, even filing for bankruptcy costs money in legal fees. Some people cannot afford to file.

If you are declared bankrupt, you do not have to pay most of your debts. You may lose your house, but you will not have to pay off the mortgage. You cannot get out of paying off student loans by filing for bankruptcy.

Signs that you are facing fiscal distress that might lead to bankruptcy include the following:

You are missing payments.  You cannot pay big bills, such as mortgages, auto-loans and credit cards, as they come due.

You do not have enough assets and income to get help with debt management. Groups are available to help you manage your debt. However, they will not help you if you cannot make payments.

If you have a home-equity loan, you have run through it. That is, if you have a home. These loans can be used to pay off credit card debt. They have a lower interest rate

You are getting phone calls from debt collectors. More than one-third of Americans get calls from debt collectors.

You have maxed out on your credit cards. This is the end of the line for credit. It means you used the cards for everyday expenses. No one will give you another credit card.

You are getting payday loans. It means you are paying high-interest rates.  You are usually paying off one loan by getting another. Bankruptcy is the next step.

You have no money for emergencies. Any problem — losing a job or illness — can be the end.

Some people do not have to worry about bankruptcy. They have no money and no assets to attach or collect. This is called poverty. It is not recommended.

Source: The Arizona Republic August 4, 2014

Print Friendly

In Brief

Sitting, Standing, Moving: The Road to Health 

At some jobs, you stand all day. At some other jobs, you are sitting at a desk. Whether standing or sitting, eight hours of...

Protecting the Unborn and Newborn From Asthma

The number of people with asthma is growing. About 300 million people worldwide have it. About 26 million people in America have it. Only...

Too Many Antibiotics Can Make Children Heavier

Children who use a lot of antibiotics gain more weight than others. The weight they gain may stay with them into adulthood.

A study of...

Enemy of the Day: Sugar

The U.S. government is saying how much sugar we should consume. They suggest that only 10 percent of the average person’s calories should come...


  • dictionary
  • English Dictionary

Double click on any word on the page or type a word:

Powered by DictionaryBox.com
Click to listen highlighted text!