Personal bankruptcy is never the ideal situation to be in, however many individuals find relief in confronting their financial difficulties and starting over. Nobody is perfect, and people make mistakes. Yet too many individuals avoid filing for bankruptcy for far too long. They prefer to ignore the elephant in the room and spend years struggling just to make ends meet. Yes, bankruptcy is never enjoyable and lots of people find it embarrassing, nevertheless 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 necessary to identify the warning signs. Here are a couple of signs that you’re in serious financial trouble.
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 isn’t increasing. Interest charges and fees will quickly force you to make a change, either by acquiring a second job or consolidating your loans. And if you don’t make a change, something must give at some point. Naturally, it’s okay to have a balance on your credit card debt for a few months, but it’s crucial that you think long-term. If you’re sinking in interest fees 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 suggest having three to six months of living expenses in a specialised savings account. This account should cover all of your expenses for that period: rent, food, petrol, bills. What happens if you lose your job? Or can’t work because of a health condition? And if you’re buying luxury items while you have high interest loans outstanding, you should really get your priorities straight. Without 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 comfortable way to buy items by giving yourself a short-term loan, particularly in today’s cashless world. Ordinarily, there is an interest-free period of a month or two, but after this time, the interest rates and charges are extraordinarily high. If you are using credit cards to pay for bills due to the fact that you simply don’t have enough cash, 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 quite harmful if used incorrectly. Paying bills with debt only generates more debt, with big interest charges added on. If this sounds familiar, seek professional advice asap.
Debt collectors are contacting you
It may appear to be obvious, but if debt collectors are invariably harassing you on the phone or in the mail, you should think of bankruptcy help. Think about it this way; lenders who conclude that they can’t recover their money from you will sell your debt at a reduced rate to debt collectors. If creditors have lost faith in your ability to pay your bills, there is certainly a problem. If you’re afraid to answer the phone or check your mail as a result of debt collectors, it’s time to take action. 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 distressed about your financial future that you can’t sleep at night? This is probably the biggest warning sign that you’re heading for bankruptcy. When your health and happiness are diminishing due to 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 find out what options you have.
If you’re experiencing any of these warning signs, chances are that you’re already 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 Parramatta on 1300 795 575 or visit http://www.bankruptcyexpertsparramatta.com.au