Personal bankruptcy is never the preferred situation to be in, however many people find relief in dealing with their financial difficulties and starting afresh. Nobody 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 battling just to make ends meet. Yes, bankruptcy is never pleasurable and many individuals find it humiliating, nevertheless it is the very first step towards financial freedom. Always remember that there is a life after bankruptcy.
If you’re struggling financially and looking at bankruptcy, it’s relevant 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 complications 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 getting 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 important 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 find 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 specialised bank account. This account should cover all your expenses for that time period: rent, food, petrol, bills. What happens if you lose your job? Or you cannot work due to 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 bank account, personal insolvency may well become a reality.
Using credit cards to pay your bills.
Credit Cards are an useful way to buy items by giving yourself a short-term loan, particularly in today’s cashless society. Commonly, 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 are using credit cards to pay for bills simply because you simply don’t have enough savings, 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 dangerous if used incorrectly. Paying bills with debt only brings about more debt, with big interest charges added on. If this sounds familiar, seek professional advice asap.
Debt collectors are getting in touch with you
It may appear to be obvious, but if debt collectors are regularly plaguing you on the phone or in the mail, you should contemplate bankruptcy help. Consider it this way; lenders who feel that they aren’t able to 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 frightened to answer the phone or open your mail as a result of debt collectors, it’s time to take action. You can only dismiss those threatening phone calls and letters for so long before your quality of life begins to corrode. Pick up the phone and call the professionals, that’s what they’re there for.
Are you so distressed 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 disintegrating because of your financial circumstances, it’s time to recognise 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. Talk to a bankruptcy expert to discover 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 commonly there are options before you need file for bankruptcy. To find out what options you have, or to talk to someone about your situation, contact Bankruptcy Experts Gosford on 1300 795 575 or visit http://www.bankruptcyexpertsgosford.com.au