Warning Signs That Can Lead To Bankruptcy

Warning Signs That Can Lead to Bankruptcy

Warning Signs That Can Lead to Bankruptcy

Finances are complicated for many people these days, and we see record numbers of new bankruptcy cases across the state. But there are signs and symptoms to be aware of that indicate you may be headed for bankruptcy. And being aware of these indicators while working alongside our team at Mummert Law can ultimately help you experience financial relief.

Signs and Symptoms of Bankruptcy for Individuals

There are a variety of indications that you may be on your way to bankruptcy. Though they’re pretty standard, we understand that they can be stressful if you’re experiencing them. The following are some of those early warning signs.

1. If you have more bills or expenses than you can pay

One key indicator is that you have more money going out than coming in. Eventually, you’ll need to manage those expenses. If not, you could face significant financial stress.

2. A life-changing event occurs

Divorce, medical emergencies, a death, or unforeseen layoff can all lead to financial struggles. Once you get behind, bills can add up, and you could face increasing challenges in paying them off.

3. Accumulating credit card debt

People often turn to credit cards when their money runs empty. Unfortunately, this causes a snowball effect. Once your cards have maxed out, you may have to take out a home equity line of credit or pull from your retirement. As a result, you may find that you’re in a financial hole from which you can’t break free.

In addition, paying minimum payments or making late payments, resulting in fees and high-interest rates, can also indicate that you may have to look at bankruptcy.

4. Being contacted by bill collectors and creditors

If you’re 30 days delinquent on your credit card, car, or house payment, don’t be surprised if collection agencies begin contacting you. Their persistent phone calls can add stress and anxiety to an already overwhelming situation.

5. Borrowing money

Another early indicator that you could face bankruptcy is borrowing money from those close to you. You could also be taking cash advances from one credit card to cover another, entangling you and an increasing debt pile.

6. You can’t cover necessary expenses

If you have to put off essential expenditures, like healthcare, you may be at risk of filing for bankruptcy soon.

7. You are often stressed or worried over financial concerns.

Concerns over finances can happen periodically for many people. But if you’re finding that it’s a regular occurrence, causing chronic anxiety, you may be headed for bankruptcy. And to top it off, you may experience health problems due to your stress.

Signs and Symptoms of Bankruptcy for Businesses

Similar to individuals, businesses can also be at risk of filing for bankruptcy. While there is some overlap with personal indicators, organizations face unique challenges and bankruptcy symptoms. The following are some early warning indicators:


  • Continual decreases in your cash flow
  • Critical leaders or employees leave your organization
  • Low cash amount or capital balance
  • Unable to satisfy debt obligations like loan or lease payments
  • Struggles to meet payroll obligations
  • Increasing credit card interest rates
  • Continual contact with collection agencies


Being aware of signs and symptoms that predict your potential road to bankruptcy can be a vital first step in finding financial relief. And if you are experiencing any of these warning signs and are concerned bankruptcy is near, we can help! At Mummert Law, we’re available for a consultation. At this time, we’ll sit down together, evaluate your position, and determine the best way to proceed. So don’t go it alone when it comes to financial struggles. Make your appointment with Mummert Law today!