Is Bankruptcy My Best Option? How To Know If Bankruptcy Is Right For You

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Going through financial hardship is a considerably stressful situation and sadly, millions of people throughout the world end up in this position every day. People in this predicament have a number of options to recover from their financial burdens, and bankruptcy should be thought of as a last resort when all other options have been exhausted. You’ve quite possibly seen a number of those debt consolidating businesses advertise their services on TV for example. In a lot of cases, it can be overwhelming to try to figure out the best way to recover from financial challenges, and many will turn to bankruptcy simply because it seems to be the simplest way of doing so. But how do you know if bankruptcy is the right alternative for you? This article will shed some light into bankruptcy in order to help you determine if bankruptcy is the best option for your specific scenario.

 

Bankruptcy has some pretty severe financial implications: a bad credit history, increased difficulty in securing loans, and higher interest rates are just several of these. So it goes without saying, bankruptcy shouldn’t be taken lightly. There are a number of debt consolidating businesses that are happy to help, which is similar to bankruptcy as all your debts are combined into one. This is commonly considered a realistic alternative to bankruptcy as the financial penalties aren’t as severe. But the best way to find out if bankruptcy is the best option for you is to ask for professional advice from bankruptcy experts. In the meantime, however, here are some signs that your financial situation is in a serious condition and bankruptcy may be the best alternative for you.

 

No Savings

 

If you don’t have any savings in the bank and you’re confronting a mountain of debt, then bankruptcy may well be the best solution for you. Even if you are capable to work a second job to increase your cash flow, will this allow you to recover from your debts in the next 5 years? If no, then you should look into seeking professional advice about your position, as bankruptcy can be an attractive alternative. Filing for bankruptcy will relieve you of these debts and whilst there are financial consequences, it’s probably the best way to recover in this situation.

 

Making Minimum Repayments Only

 

If you can only afford to make the minimum repayments on your debts, then the interest on these debts will compound rapidly and you should really consider bankruptcy before your condition decays further. Without any supplementary income, it can often times take up to 30 years to repay your debts by making minimum repayments only, so all the interest you’ll be paying over this time can really amount to huge sums of money. Although you’ll still be paying off debts with interest after filing for bankruptcy, normally you can arrange better terms on conditions on your debts after declaring bankruptcy.

 

Debt Collectors Are Calling You

 

When you’re being regularly hassled by debt collectors on the telephone and in the mail, it’s an indicator that your financial condition is deteriorating and you ought to make some changes. When you’re being contacted by debt collectors, it means that your creditors have sold your debts at highly discounted prices to debt collectors because they feel that you aren’t in a situation to settle these debts in a reasonable period of time. This is a clear sign that you should honestly consider filing for bankruptcy as it’s possibly the best option for both your finances and your mental well-being.

 

Though there are some severe financial implications, bankruptcy isn’t the end of the world and in most cases, it’s the first step to financial freedom. When you’re confronting a mountain of debt and you can’t see any way of recovering in the near future, it’s time to seek professional advice to find out what options you have. While there are many alternatives available to assist you in financial hardship, if you’re experiencing any of the above warning signs then chances are that bankruptcy is the best alternative to ensure you and your family can secure a bright future. Regardless, if you’re facing financial difficulties, it’s best to consult with bankruptcy professionals sooner rather than later. For a confidential discussion regarding your financial scenario, contact Bankruptcy Experts Sunshine Coast on 1300 795 575 or visit www.bankruptcyexpertssunshinecoast.com.au

 

Charles Bosse

Director of Fresh Start Solutions and specialises in helping people free themselves from overwhelming debt. Whether it's Bankruptcy, Liquidation, Insolvency Advice or simply General Debt Advice.

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