The cost of everyday living is high and managing to live within your means can be a challenging feat even for the financially savvy. Bills can easily pile up and cause your finances to spin out of control. If you are constantly struggling to pay your bills, falling behind payments, your situation may be critical.

Are you heading for bankruptcy?

You probably are if some of these habits sound familiar:

1. Using credit cards to pay for everyday expenses could be an indicator that your cash reserves are so low you cannot pay for everyday basics forcing you to buy living essentials on credit.

2. If you are strapped for cash and only make minimum payments on your monthly credit card bills you actually accumulate more debt by charging purchases to your credit cards while not paying them off in full every month.

3. Paying your bills late each month would point in the direction of bankruptcy as well.

4. It is also a bad sign, if you regularly resort to family, friends or payday loans to borrow money from. By doing so you only increase your debt instead of reducing it thereby digging a deeper financial hole.

5. Not having any savings or emergency funds to fall back on if you, for example, lose your job, would also make you a good candidate for bankruptcy filing.

It is easy to enter this vicious cycle of accumulating more and more debt. Filing for bankruptcy can help you bring your financials in order and start with a clean slate but it would be very important to learn to spend within your means to avoid subsequent bankruptcy filings. Making a budget and learning to live with it no matter how challenging, will prevent you from defaulting on your debt, allowing you to build your credit rating for a sound financial future.