Personal bankruptcy is never the preferred situation to be in, however lots of people find relief in confronting their financial issues and starting afresh. No one is perfect, and people make mistakes. Yet too many individuals put off filing for bankruptcy for far too long. They prefer to ignore the elephant in the room and spend several years struggling just to make ends meet. Yes, bankruptcy is never enjoyable and many individuals find it humiliating, however it is the very first step towards financial freedom. Always remember that there is a life after bankruptcy.
If you’re struggling financially and contemplating bankruptcy, it’s relevant to understand the warning signs. Here are a few signs that you’re in serious financial distress.
Making minimum repayments only
One of the clearest signs of financial challenges is when you can only afford the minimum repayments on your loans, yet your income source isn’t increasing. Interest charges and fees will soon force you to make a change, either by working 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 realise that your savings are being used to make repayments on your loans, you’re heading for trouble. A large number of financial specialists highly recommend having three to six months of living expenses in a dedicated bank account. This account should cover all your expenses for that time period: rent, food, petrol, bills. What would happen if you lose your job? Or you can’t work due to illness? And if you’re buying luxury items while you have high interest loans unsettled, you should really get your priorities straight. Without three to six months of living expenses in your savings account, personal insolvency may well become a reality.
Using credit cards to pay your bills.
Credit Cards are a comfortable way to purchase items by giving yourself a short-term loan, particularly in today’s cashless society. Typically, there is an interest-free period of a month or two, but after this time, the interest rates and charges are incredibly high. If you are using credit cards to pay for bills since you simply don’t have enough savings, you’re on the brink of disaster. Some people will even have numerous 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 very precarious if used poorly. Paying bills with debt only creates 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 continually plaguing you on the phone or in the mail, you should contemplate bankruptcy help. Think about it this way; creditors who feel that they cannot recover their money from you will sell your debt at a reduced rate to debt collectors. If lenders have lost faith in your capability to pay your bills, there is obviously a problem. If you’re frightened to answer the phone or open your mail because of debt collectors, it’s time to act. You can only ignore those threatening phone calls and letters for so long before your quality of life starts to languish. Pick up the phone and call the specialists, that’s what they’re there for.
Are you so troubled about your financial future that you can’t sleep at night? This is most probably the greatest warning sign that you’re moving towards bankruptcy. When your health and happiness are descending due to your financial condition, it’s time to acknowledge that you need help simply to improve your quality of life. Bankruptcy is not the end of the world, and is, in fact, the first step towards financial freedom. Talk with a bankruptcy expert to find out what options you have.
If you’re experiencing any of the above warning signs, chances are that you’re presently in financial trouble and are heading towards bankruptcy if changes aren’t made. Personal insolvency is the final step in a long process, and commonly there are options before you need file for bankruptcy. To find out what options you have, or to speak to someone about your situation, contact Bankruptcy Experts Maitland on 1300 795 575 or visit http://www.bankruptcyexpertsmaitland.com.au