Personal bankruptcy is never the best situation to be in, however lots of people find relief in addressing their financial problems and starting over. Nobody is perfect, and people make mistakes. Yet a lot of individuals hold off filing for bankruptcy for far too long. They prefer to ignore the elephant in the room and spend many years struggling just to make ends meet. Yes, bankruptcy is never pleasant and many individuals find it embarrassing, 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 contemplating bankruptcy, it’s relevant to acknowledge the warning signs. Here are a few 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 time. Of course, 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. A large number of financial experts strongly recommend having three to six months of living expenses in a separate bank account. This account should cover all your expenses for that period of time: rent, food, petrol, bills. What happens if you lose your job? Or cannot work due to a health condition? 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 convenient way to buy items by giving yourself a short-term loan, particularly in today’s cashless society. Often, 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 are using credit cards to pay for bills due to the fact 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 repay one with another. This is a key sign that you’re steering towards personal bankruptcy. Credit cards can be quite hazardous if used incorrectly. Paying bills with debt only causes more debt, with big interest charges added on. If this sounds familiar, seek professional advice as soon as possible.
Debt collectors are phoning you
It may seem to be obvious, but if debt collectors are continuously harassing you on the phone or in the mail, you should look at bankruptcy help. Think about it this way; creditors who believe that they can’t recover their loan from you will sell your debt at a lower rate to debt collectors. If lenders have lost faith in your capacity to pay your bills, there is surely 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 avoid those threatening phone calls and letters for so long before your quality of life begins to diminish. Pick up the phone and call the experts, that’s what they’re there for.
Are you so concerned about your financial future that you can’t sleep at night? This is probably the biggest warning sign that you’re steering towards bankruptcy. When your health and happiness are diminishing due to your financial situation, 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, in fact, the first step towards financial freedom. Speak to a bankruptcy expert to identify what options you have.
If you’re encountering any of the above warning signs, chances are that you’re currently 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 Joondalup on 1300 795 575 or visit http://www.bankruptcyexpertsjoondalup.com.au