Personal bankruptcy is never the ideal situation to be in, however many individuals find relief in confronting their financial issues and starting afresh. Nobody is perfect, and people make mistakes. But a lot of people put off filing for bankruptcy for far too long. They would prefer to ignore the elephant in the room and spend years struggling just to make ends meet. Yes, bankruptcy is never satisfying and lots of people find it humiliating, however 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 into bankruptcy, it’s useful to identify the warning signs. Here are a couple of signs that you’re in serious financial trouble.
Making minimum repayments only
One of the clearest signs of financial difficulties 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 finding a second job or consolidating your loans. And if you don’t make a change, something must give at some time. Surely, it’s alright to have a balance on your credit card debt for a few months, but it’s imperative 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 realise that your savings are being used to make repayments on your loans, you’re heading for trouble. Most financial specialists strongly recommend having three to six months of living expenses in a dedicated savings account. This account should cover all of your expenses for that period of time: rent, food, transport, bills. What would happen if you lose your job? Or can’t work due to illness? 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 bank account, personal insolvency may well become a reality.
Using credit cards to pay your bills.
Credit Cards are a helpful way to pay for items by giving yourself a short-term loan, particularly in today’s cashless society. Normally, there is an interest-free period of a month or two, but after this time, the interest rates and fees are exceptionally 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 various 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 harmful if used wrongfully. Paying bills with debt only creates more debt, with big interest charges added on. If this sounds familiar, seek professional advice immediately.
Debt collectors are contacting you
It may seem to be obvious, but if debt collectors are continuously plaguing you on the phone or in the mail, you should think of bankruptcy help. Think of it this way; creditors who believe that they cannot recuperate their loan from you will sell your debt at a discounted rate to debt collectors. If lenders have lost faith in your capability to pay your bills, there is definitely a problem. If you’re frightened to answer the phone or check your mail due to 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 starts to corrode. Pick up the phone and call the professionals, that’s what they’re there for.
Are you so anxious about your financial future that you can’t sleep at night? This is quite possibly the most significant warning sign that you’re heading for bankruptcy. When your health and happiness are languishing due to your financial circumstances, it’s time to acknowledge 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 with a bankruptcy expert to discover what options you have.
If you’re encountering any of the above warning signs, chances are that you’re already in financial hardship 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 circumstances, contact Bankruptcy Experts Sunshine Coast on 1300 795 575 or visit http://www.bankruptcyexpertssunshinecoast.com.au