Personal bankruptcy is never the ideal predicament to be in, however lots of people find relief in dealing with their financial problems and starting afresh. No one is perfect, and people make mistakes. But too many individuals put off filing for bankruptcy for far too long. They would prefer to ignore the elephant in the room and spend many years struggling just to make ends meet. Yes, bankruptcy is never appealing and lots of people find it embarrassing, however 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 considering bankruptcy, it’s relevant to recognise the warning signs. Here are a couple 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 source of income isn’t increasing. Interest charges and fees will soon 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 eventually. Of course, it’s fine to have a balance on your credit card debt for a few months, but it’s useful that you think long-term. If you’re sinking 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. A large number of financial experts highly recommend having three to six months of living expenses in a dedicated savings account. This account should cover all your expenses for that period of time: rent, meals, petrol, bills. What happens if you lose your job? Or you can’t work as a result of a health condition? And if you’re buying luxury items while you have high interest loans remaining, 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 purchase items by giving yourself a short-term loan, especially in today’s cashless world. Normally, there is an interest-free period of a month or two, but after this time, the interest rates and charges are exceptionally high. If you are using credit cards to pay for bills considering that you simply don’t have enough money, you’re on the brink of disaster. Some people will even have numerous credit cards so they can pay off one with another. This is a key sign that you’re steering towards personal bankruptcy. Credit cards can be rather destructive if used improperly. Paying bills with debt only results in more debt, with big interest charges added on. If this sounds familiar, seek professional advice asap.
Debt collectors are phoning you
It may seem to be obvious, but if debt collectors are invariably harassing you on the phone or in the mail, you should think about bankruptcy help. Visualise it this way; lenders who believe that they aren’t able to recuperate 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 obviously a problem. If you’re frightened to answer the phone or open your mail because of debt collectors, it’s time to act. You can only ignore those threatening phone calls and letters for so long before your quality of life begins to languish. Pick up the phone and call the professionals, that’s what they’re there for.
Are you so concerned 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 descending due to your financial situation, 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. Speak 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 distress and are heading towards bankruptcy if changes aren’t made. Personal insolvency is the final step in a long process, and normally 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 Cassowary Coast on 1300 795 575 or visit http://www.bankruptcyexpertscassowarycoast.com.au