Personal bankruptcy is never the ideal predicament to be in, however many individuals find relief in addressing their financial difficulties and starting afresh. Nobody is perfect, and people make mistakes. Yet a lot of individuals put off filing for bankruptcy for far too long. They choose to ignore the elephant in the room and spend several years battling just to make ends meet. Yes, bankruptcy is never pleasing and lots of individuals find it humiliating, nevertheless it is the very first step towards financial freedom. Always remember that there is a life after bankruptcy.
If you’re struggling financially and considering bankruptcy, it’s important to recognise the warning signs. Here are a few signs that you’re in serious financial hardship.
Making minimum repayments only
One of the clearest signs of financial problems is when you can only afford the minimum repayments on your loans, yet your income source isn’t increasing. Interest charges and fees will eventually force you to make a change, either by finding a second job or consolidating your loans. And if you don’t make a change, something must give at some time. Of course, it’s fine to have a balance on your credit card debt for a few months, but it’s imperative that you think long-term. If you’re sinking 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. Most financial specialists advise having three to six months of living expenses in a specialised savings account. This account should cover all your expenses for that period: rent, food, petrol, bills. What would happen if you lose your job? Or you cannot work as a result of a health condition? And if you’re purchasing luxury items while you have high interest loans unsettled, you should really get your priorities straight. Without having 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 helpful way to buy items by giving yourself a short-term loan, especially in today’s cashless society. Commonly, there is an interest-free period of a month or two, but after this time, the interest rates and fees are exceptionally high. If you end up using credit cards to pay for bills because you simply don’t have enough cash, you’re on the brink of disaster. Some people will even have numerous credit cards so they can repay one with another. This is a key sign that you’re looking at personal bankruptcy. Credit cards can be very dangerous if used incorrectly. Paying bills with debt only creates more debt, with big interest charges added on. If this sounds familiar, seek professional advice immediately.
Debt collectors are phoning you
It may appear to be obvious, but if debt collectors are frequently hassling you on the phone or in the mail, you should contemplate bankruptcy help. Think of it this way; lenders who feel that they aren’t able to recover their money from you will sell your debt at a lower rate to debt collectors. If lenders have lost faith in your capacity to pay your bills, there is most certainly a problem. If you’re scared 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 begins to disintegrate. Pick up the phone and call the experts, that’s what they’re there for.
Are you so anxious about your financial future that you can’t sleep at night? This is probably the greatest warning sign that you’re moving towards bankruptcy. When your health and happiness are deteriorating as a result of your financial situation, 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, literally, the first step towards financial freedom. Consult with a bankruptcy expert to identify what options you have.
If you’re encountering any of these warning signs, chances are that you’re currently in financial calamity 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 speak to someone about your circumstances, contact Bankruptcy Experts Alice Springs on 1300 795 575 or visit http://www.bankruptcyexpertsalicesprings.com.au