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5 Bankruptcy Warning Signs That Could Be Exacerbated by Holiday Spending

The holidays mean different things to every family, but one thing they usually have in common is increased spending during holiday months. Many households go all out starting as early as Halloween, continuing through Thanksgiving and their winter holiday, closing out with New Year’s Eve and Day. Experts predicted that this year would break records for holiday shopping, despite nationwide concerns over inflation and the cost of living. In fact, there was a prediction that holiday spending would increase by 10% from $669 to $736 this year. But now that Thanksgiving and Black Friday have passed, we have more insight into holiday shopping trends for 2025. This year, American consumers spent $6.4 billion on Thanksgiving Day, which is up from last year. They also spent $11.8 billion online shopping on Black Friday. However, sales volume was down by 1% and prices were up by 7%, so any increases in consumer spending were spurred by inflation rather than increased enthusiasm for the holidays. One might surmise that families will be getting less quantity for a higher price for the rest of the holiday season this year.

Delivering less to your family this year while feeling more strain on your bank account is an unpleasant feeling. That trend is unlikely to die out this year, especially when things seem so bleak, and any opportunity for joy is welcome. Many families overspend during the holiday season and end up paying the price through credit card interest all year round. Bankruptcy provides a path to clearing debt from credit cards and a variety of other sources. If you are considering a filing in the Phoenix or Tucson area, start your debt relief journey with a free and convenient phone consultation with our firm at 480-470-1504.

1. You’ve Stopped Answering Calls From Unknown Numbers

Perhaps declining calls from unknown numbers has always been part of your lifestyle. But if you have debt with no game plan to get out of it, you probably know that many calls you receive from unknown numbers are from your creditors. You might have already tried negotiating alternative payment arrangements with these creditors, only to fall behind on them with no way to catch up. Creditors have a wide range of tactics they can legally use to make you feel intimidated if you don’t pay your debts. The good news is that you can stop these calls as soon as you make the decision to file for bankruptcy in Arizona—before your petition is filed. After retaining a bankruptcy attorney, you can direct all creditors to call them instead. This can relieve stress off of you during the holiday season and keep family members from learning of financial difficulties.

2. You Have Multiple Maxed Out Credit Cards

Spending using credit cards comes with credit building benefits and points accrual that don’t accompany spending with a regular checking account. But it is also easy to overspend with credit cards when you can’t see the money physically leaving your wallet. The best way to use credit cards is by spending only what you can afford and paying off the balance in full at the end of each month. But when this isn’t possible, the credit card user will accrue interest on the amount they can’t pay. Currently, the average credit card interest rate is 25.32% in the United States. If you max out credit cards buying holiday gifts and other items, it could cause your debt to spiral out of control.

3. You Are Being Denied New Lines of Credit

If you’ve been denied a credit card application, or even felt apprehension about applying due to poor credit, bankruptcy could be the best way to alleviate the issue. How much bankruptcy impacts a debtor’s credit depends on several different factors. And a debtor can take steps to rebuild credit after bankruptcy. If you need a new credit card to fund your holiday purchases and have been denied, it may be time to consider an Arizona bankruptcy filing.

4. You Can’t Sleep Due to Debt Problems

The holidays can be a tiring time without losing sleep over debt. If your financial difficulties keep you up at night, it can make it harder to get up and go to work the next day. Sleep is crucial to health, but many people struggle with insomnia when they are stressed. You may have holiday visitors who notice your night hours and what keeps you awake. If you discharge debts through bankruptcy, you can rest easy knowing your assets are protected and you have all the power over improving your credit and overall financial situation.

5. You Don’t Foresee Your Financial Situation Changing In The New Year

The start of the holiday season means the end of the year is approaching. The new year can bring changes and inspire resolutions, but not everyone has the power to change their financial situation without outside intervention. Without a new job lined up, or an inheritance or lawsuit settlement in the works, next year only shows signs of being more difficult than this year. But bankruptcy can provide a hard stop to the cycle of debt. Upon filing, a bankruptcy debtor receives an immense legal protection known as the automatic stay. This protection lasts until the debtor’s case is discharged or dismissed. It is the motivation behind many bankruptcy filings, as it can stop lawsuits, evictions, repossessions, and more. In theory, the automatic stay will last 3 to 6 months in a chapter 7 bankruptcy case, and 3 or 5 years in a chapter 13 bankruptcy case. This gives the debtor time and peace of mind to work out debts that won’t be cleared by bankruptcy.

During the holidays, bankruptcy is most relevant for its ability to wipe out credit card debt. In the United States, another of the most common types bankruptcy used to clear is medical debt. Both of these types of unsecured debts can get worse over time, as credit cards have high interest rates, and medical problems can be ongoing and reduce the patient’s ability to work. Secured debts can also be an exacerbating problem. For example, someone who finances their vehicle might have it repossessed after just one missed payment. In addition to losing their method of transportation, they could be left with a repossession deficiency, suffer damage to their credit which makes it difficult to finance a replacement vehicle, etc. The same goes for a home foreclosure, although the process takes much longer and has more legal standards that must be met.

Don’t Ignore The Warning Signs. Prepare For Bankruptcy By Learning More Today.

Bankruptcy provides fast and comprehensive relief to debt collection efforts by creditors. A debtor can use an emergency filing to protect their assets with the automatic stay quickly. But the most can be gained from bankruptcy when it is filed knowledgeably and strategically. Every member of our Arizona law office has that skill set that can be employed to ensure you have a seamless bankruptcy filing. Preparing for bankruptcy now can help you avoid the drawbacks of a hasty filing in the future. Learn the ins and outs of filing for bankruptcy in Arizona today with your free consultation by phone. Get scheduled today by calling 480-470-1504.