Personal bankruptcy is never the preferred situation to be in, however lots of individuals find relief in addressing their financial problems and starting over. Nobody is perfect, and people make mistakes. But too many individuals avoid filing for bankruptcy for far too long. They choose to ignore the elephant in the room and spend years struggling just to make ends meet. Yes, bankruptcy is never satisfying and lots of individuals find it humiliating, however it is the very first step towards financial freedom. Always bear in mind that there is a life after bankruptcy.
If you’re struggling financially and looking into bankruptcy, it’s necessary to identify the warning signs. Here are a number of signs that you’re in serious financial hardship.
Making minimum repayments only
One of the clearest signs of financial complications is when you can only afford the minimum repayments on your loans, yet your source of income isn’t increasing. Interest charges and fees will shortly force you to make a change, either by getting a second job or consolidating your loans. And if you don’t make a change, something must give at some time. Naturally, it’s alright to have a balance on your credit card debt for a few months, but it’s necessary that you think long-term. If you’re suffocating in interest charges and can only afford to make the minimum repayments, it’s time to make a change.
If you’re living paycheck to paycheck and find that your savings are being used to make repayments on your loans, you’re heading for trouble. Most financial specialists strongly recommend having three to six months of living expenses in a separate bank account. This account should cover all your expenses for that time frame: rent, meals, petrol, bills. What would happen if you lose your job? Or cannot work due to a health condition? And if you’re buying luxury items while you have high interest loans overdue, you should really get your priorities straight. Without having three to six months of living expenses in your bank account, personal insolvency may well become a reality.
Using credit cards to pay your bills.
Credit Cards are a convenient way to pay for items by giving yourself a short-term loan, particularly in today’s cashless world. Often, there is an interest-free period of a month or two, but after this time, the interest rates and charges are extremely high. If you end up using credit cards to pay for bills since you simply don’t have enough money, you’re on the brink of disaster. Some people will even have several credit cards so they can pay off one with another. This is a key sign that you’re steering towards personal bankruptcy. Credit cards can be quite dangerous if used incorrectly. Paying bills with debt only causes more debt, with big interest charges added on. If this sounds familiar, seek professional advice asap.
Debt collectors are getting in touch with you
It may appear to be obvious, but if debt collectors are continuously hassling you on the phone or in the mail, you should look at bankruptcy help. Imagine it this way; lenders who conclude that they aren’t able to recoup their money from you will sell your debt at a discounted rate to debt collectors. If creditors have lost faith in your capability to pay your bills, there is most certainly a problem. If you’re scared to answer the phone or check your mail due to debt collectors, it’s time to take action. You can only overlook those threatening phone calls and letters for so long before your quality of life starts to suffer. Pick up the phone and call the specialists, that’s what they’re there for.
Are you so anxious about your financial future that you can’t sleep at night? This is likely the greatest warning sign that you’re steering towards bankruptcy. When your health and happiness are deteriorating because of your financial situation, it’s time to recognise that you need help simply to improve your quality of life. Bankruptcy is not the end of the world, and is, literally, the first step towards financial freedom. Speak with a bankruptcy expert to find out what options you have.
If you’re experiencing any of these warning signs, chances are that you’re actively in financial distress and are heading towards bankruptcy if changes aren’t made. Personal insolvency is the final step in a long process, and usually there are options before you need file for bankruptcy. To find out what options you have, or to talk with someone about your financial condition, contact Bankruptcy Experts Taree on 1300 795 575 or visit http://www.bankruptcyexpertstaree.com.au