Personal bankruptcy is never the preferred position to be in, however lots of individuals find relief in addressing their financial difficulties and starting over. No one is perfect, and people make mistakes. But a lot of men and women put off filing for bankruptcy for far too long. They choose to ignore the elephant in the room and spend several years struggling just to make ends meet. Yes, bankruptcy is never enjoyable and lots of people find it humiliating, 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 looking into bankruptcy, it’s useful 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 difficulties 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 getting 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 fine to have a balance on your credit card debt for a few months, but it’s important 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 advisors 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, food, petrol, bills. What would happen if you lose your job? Or cannot work because of illness? 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 handy way to pay for 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 remarkably high. If you end up using credit cards to pay for bills due to the fact that you simply don’t have enough funds, 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 harmful if used incorrectly. Paying bills with debt only results in more debt, with big interest charges added on. If this sounds familiar, seek professional advice immediately.
Debt collectors are contacting you
It may seem obvious, but if debt collectors are constantly harassing you on the phone or in the mail, you should contemplate bankruptcy help. Imagine it this way; creditors who believe that they aren’t able to recuperate their money 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 obviously a problem. If you’re afraid to answer the phone or check your mail because of debt collectors, it’s time to take action. You can only brush off those threatening phone calls and letters for so long before your quality of life starts to suffer. Pick up the phone and call the experts, that’s what they’re there for.
Are you so upset about your financial future that you can’t sleep at night? This is likely the greatest warning sign that you’re heading for bankruptcy. When your health and happiness are disintegrating 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 truth, the first step towards financial freedom. Talk to a bankruptcy expert to discover 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 usually there are options before you need file for bankruptcy. To find out what options you have, or to speak with someone about your financial condition, contact Bankruptcy Experts Tennant Creek on 1300 795 575 or visit http://www.bankruptcyexpertstennantcreek.com.au