Financial Restoration: Three Debt Hurdles that Can Derail Your Financial Life and How to Regain Control Before it’s Too Late

Posted on in Debt Relief

personal bankruptcy, financial restoration, Cook County bankruptcy attorneyThe road to serious debt and circumstances that lead to personal bankruptcy begin with small steps that snowball and create a much larger, looming problem. The moment you realize you owe more money than you make each month, you have already begun traveling down the slippery slope to financial crisis. Such crisis does not have to end in ruin, however. Recognizing debt hurdles and tackling them as soon as you acknowledge them gives you the opportunity to regain control and ultimately put your financial life back in order, before it is too late.

Debts That Lead to Serious Damage

There are a number of debts that can work against you when you allow payments to fall behind. However, certain debts in particular can really wreak havoc on your financial life: Credit card accounts, mortgage accounts, and bills owed to the IRS are especially risky when neglected. Should you fall behind on these kinds of payments, you may be looking at serious penalties that can potentially lead to devastating financial loss.

Here are three significant financial hurdles you may be faced with if you are unable to pay your debts on time, and in full:

  1. Wage Garnishments — Wage garnishments are typically associated with failure to pay IRS dues, but a number of different collection agencies can bring a court order against you to garnish your wages for an unpaid debt. For example, if one of your credit card accounts is turned over to a collection agency, that agency may have the right to bring the action to court and pursue your wages to settle the debt.
  2. Foreclosures — Foreclosure processes vary from state to state and can depend on your particular lender, but most mortgage companies begin to foreclose on your home within 3 to 6 months after your first missed payment. Losing your home as result of foreclosure is just the tip of the iceberg when it comes to consequences for missing your mortgage payments. Your credit will be damaged, which affects your ability to buy another home down the road, as well as the ability to acquire other loans.
  3. Collection Judgements — Along with wage garnishment, various collection judgements brought about by court orders can be utilized by collection agencies to pursue the money owed to them. Harassing phone calls and letters usually lead up to these court actions, which may involve everything from seizing your personal property to staking claim on your bank account balances.

Whether you are facing any of these circumstances due to credit card debt or missed IRS payments, it is crucial to stay in contact with your lenders early on and notify them of your reasons for being unable to pay whatever debts you owe. If it is too late and you have already fallen behind on this important communication, then it may be time to speak with a qualified Cook County personal bankruptcy attorney who can advise you on what steps to take next in order to avoid serious consequences. Call the Law Offices of Eric G. Zelazny today at 708-888-2299 for a personal consultation.



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