Personal bankruptcy is never the preferred predicament to be in, however many individuals find relief in addressing their financial difficulties and starting afresh. No one is perfect, and people make mistakes. Yet too many individuals hold off filing for bankruptcy for far too long. They choose to ignore the elephant in the room and spend years fighting just to make ends meet. Yes, bankruptcy is never pleasant and lots of people find it embarrassing, 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 considering bankruptcy, it’s relevant to acknowledge the warning signs. Here are a couple of signs that you’re in serious financial distress.
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 quickly 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 fine to have a balance on your credit card debt for a few months, but it’s useful 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 experts highly recommend having three to six months of living expenses in a dedicated savings account. This account should cover all of your expenses for that time period: rent, meals, transport, bills. What happens if you lose your job? Or cannot work due to illness? And if you’re buying luxury items while you have high interest loans overdue, 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 an useful way to purchase items by giving yourself a short-term loan, particularly in today’s cashless world. Generally, there is an interest-free period of a month or two, but after this time, the interest rates and fees are extraordinarily high. If you end up using credit cards to pay for bills simply because you simply don’t have enough funds, you’re on the brink of disaster. Some people will even have several credit cards so they can repay one with another. This is a key sign that you’re heading for personal bankruptcy. Credit cards can be rather detrimental if used poorly. 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 contacting you
It may appear obvious, but if debt collectors are frequently plaguing you on the phone or in the mail, you should look at bankruptcy help. Imagine it this way; lenders who believe that they aren’t able to recuperate their loan from you will sell your debt at a lower rate to debt collectors. If creditors have lost faith in your capability to pay your bills, there is definitely a problem. If you’re scared to answer the phone or open your mail as a result of debt collectors, it’s time to take action. You can only neglect those threatening phone calls and letters for so long before your quality of life starts to diminish. Pick up the phone and call the specialists, that’s what they’re there for.
Are you so stressed about your financial future that you can’t sleep at night? This is possibly the greatest warning sign that you’re heading for bankruptcy. When your health and happiness are languishing due to your financial predicament, it’s time to accept 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 find out what options you have.
If you’re encountering any of the above warning signs, chances are that you’re actively in financial trouble 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 to someone about your financial condition, contact Bankruptcy Experts Shellharbour on 1300 795 575 or visit http://www.bankruptcyexpertsshellharbour.com.au