Personal bankruptcy is never the preferred situation to be in, however many people find relief in dealing with their financial troubles and starting afresh. No one is perfect, and people make mistakes. Yet too many people put off filing for bankruptcy for far too long. They would prefer to ignore the elephant in the room and spend many years fighting just to make ends meet. Yes, bankruptcy is never enjoyable and many 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 looking into bankruptcy, it’s necessary to recognise 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 problems is when you can only afford the minimum repayments on your loans, yet your income isn’t increasing. Interest charges and fees will shortly 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 eventually. Needless to say, it’s alright 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 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 realise that your savings are being used to make repayments on your loans, you’re heading for trouble. The majority of financial specialists suggest having three to six months of living expenses in a separate savings account. This account should cover all your expenses for that time frame: rent, meals, petrol, bills. What happens if you lose your job? Or you cannot work because of illness? And if you’re purchasing 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 convenient way to buy 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 end up using credit cards to pay for bills considering that you simply don’t have enough savings, you’re on the brink of disaster. Some people will even have various credit cards so they can pay off one with another. This is a key sign that you’re heading for personal bankruptcy. Credit cards can be quite precarious if used improperly. Paying bills with debt only creates more debt, with big interest charges added on. If this sounds familiar, seek professional advice asap.
Debt collectors are calling you
It may appear to be obvious, but if debt collectors are constantly plaguing you on the phone or in the mail, you should contemplate bankruptcy help. Consider it this way; lenders who conclude that they aren’t able to recoup 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 most certainly a problem. If you’re afraid to answer the phone or check your mail due to debt collectors, it’s time to take action. You can only overlook those threatening phone calls and letters for so long before your quality of life starts to diminish. Pick up the phone and call the experts, that’s what they’re there for.
Are you so distressed about your financial future that you can’t sleep at night? This is most probably the most significant warning sign that you’re heading for bankruptcy. When your health and happiness are languishing due to your financial position, 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. Consult with a bankruptcy expert to discover what options you have.
If you’re experiencing any of these warning signs, chances are that you’re currently in financial distress 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 talk to someone about your financial condition, contact Bankruptcy Experts Geraldton on 1300 795 575 or visit http://www.bankruptcyexpertsgeraldton.com.au