Bankruptcy is commonly seen as a last resort to overwhelming financial problems. Debtors often understand their debt situation better than anyone else and if other options have been exhausted, bankruptcy may be a plausible idea. Sometimes it makes financial sense to file for protection instead of continuing to let yourself struggle to make payments you can't afford.
While there isn't a specific time to file, there may be certain situations that could have you thinking if bankruptcy is something to consider. You'll want to review your current situation and think about your debt obligations and how you've been able to meet them each month. It helps to review your financial obligations from the past 6 months to a year to get a better picture of where your money has been going.
Take note of any significant changes in your finances such as bill amount increases, credit card accounts you've been able to pay or have defaulted on and other patterns you notice about your situation that could be making things more challenging for you.
If you made changes in the past to your budget, how has it helped you in reducing your debt while maintaining necessary finances such the mortgage? It's possible you may have been working to reduce your debt but notice it has grown. Something else that may have you considering bankruptcy includes learning you are being sued by a creditor. Bankruptcy may be the answer to help you overcome financial burdens while regaining financial control to help you move forward.