Personal bankruptcy is never the best situation to be in, however lots of people find relief in addressing their financial problems and starting over. No one is perfect, and people make mistakes. Yet too many people hold off filing for bankruptcy for far too long. They prefer to ignore the elephant in the room and spend many years fighting just to make ends meet. Yes, bankruptcy is never enjoyable and many individuals find it humiliating, nonetheless it is the very first step towards financial freedom. Always remember that there is a life after bankruptcy.
If you’re struggling financially and thinking about bankruptcy, it’s important to acknowledge the warning signs. Here are a few signs that you’re in serious financial trouble.
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 source of income isn’t increasing. Interest charges and fees will eventually 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 point. Needless to say, it’s alright 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 drowning 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. The majority of financial experts highly recommend having three to six months of living expenses in a separate bank account. This account should cover all of your expenses for that period of time: rent, meals, transport, bills. What would happen if you lose your job? Or you cannot work because of 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 savings account, personal insolvency may well become a reality.
Using credit cards to pay your bills.
Credit Cards are a helpful way to pay for items by giving yourself a short-term loan, especially 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 fees are extraordinarily high. If you find yourself using credit cards to pay for bills given that you simply don’t have enough money, you’re on the brink of disaster. Some people will even have a couple of 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 quite hazardous if used wrongfully. Paying bills with debt only results in more debt, with big interest charges added on. If this sounds familiar, seek professional advice as soon as possible.
Debt collectors are calling you
It may seem obvious, but if debt collectors are continuously plaguing you on the phone or in the mail, you should think of bankruptcy help. Visualise it this way; lenders who feel that they cannot recover their loan from you will sell your debt at a reduced rate to debt collectors. If creditors have lost faith in your capability to pay your bills, there is undeniably a problem. If you’re scared to answer the phone or open your mail due to debt collectors, it’s time to act. You can only overlook those threatening phone calls and letters for so long before your quality of life begins to deteriorate. Pick up the phone and call the specialists, that’s what they’re there for.
Are you so nervous about your financial future that you can’t sleep at night? This is likely the biggest warning sign that you’re heading for bankruptcy. When your health and happiness are declining because of your financial condition, 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, in fact, the first step towards financial freedom. Talk to a bankruptcy expert to identify what options you have.
If you’re experiencing any of the above warning signs, chances are that you’re already in financial hardship 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 talk with someone about your circumstances, contact Bankruptcy Experts Mackay on 1300 795 575 or visit http://www.bankruptcyexpertsmackay.com.au