Signs You May Want To Consider Bankruptcy
Personal bankruptcy is never the ideal predicament to be in, however lots of individuals find relief in dealing with their financial issues and starting over. No one is perfect, and people make mistakes. But too many men and women avoid filing for bankruptcy for far too long. They would prefer to ignore the elephant in the room and spend years fighting just to make ends meet. Yes, bankruptcy is never appealing and lots of individuals find it embarrassing, nonetheless it is the very first step towards financial freedom. Always keep in mind that there is a life after bankruptcy.
If you’re struggling financially and contemplating bankruptcy, it’s useful to identify the warning signs. Here are a number of signs that you’re in serious financial hardship.
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 income source isn’t increasing. Interest charges and fees will shortly 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 okay to have a balance on your credit card debt for a few months, but it’s necessary 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 find that your savings are being used to make repayments on your loans, you’re heading for trouble. Most 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 period of time: rent, meals, petrol, bills. What would happen if you lose your job? Or you can’t work due to sickness? And if you’re purchasing 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 savings account, personal insolvency may well become a reality.
Using credit cards to pay your bills.
Credit Cards are a practical 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 fees are very high. If you end up 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 considerably harmful if used poorly. Paying bills with debt only generates 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 appear to be obvious, but if debt collectors are constantly harassing you on the phone or in the mail, you should think of bankruptcy help. Imagine it this way; lenders who believe that they can’t recover their loan from you will sell your debt at a reduced 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 as a result of debt collectors, it’s time to act. You can only avoid 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 worried about your financial future that you can’t sleep at night? This is likely the most significant warning sign that you’re steering towards bankruptcy. When your health and happiness are deteriorating because of your financial position, it’s time to realise 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. Speak to 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 hardship 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 Wollongong on 1300 795 575 or visit http://www.bankruptcyexpertswollongong.com.au