Experiencing financial hardship is a very stressful situation and unfortunately, millions of individuals throughout the world find themselves in this situation each year. People in this predicament have many options to recover from their financial distress, and bankruptcy should be thought of as a last resort when all other options have been exhausted. You’ve most probably seen a few of those debt consolidating companies advertise their services on television for example. In most cases, it can be difficult to try to find out an effective way to recover from financial dilemmas, and many will turn to bankruptcy simply because it seems the simplest way of doing so. But how do you know if bankruptcy is the right option for you? This article will shed some light into bankruptcy in order to help you figure out if bankruptcy is the best option for your particular circumstances.
Bankruptcy has some rather severe financial penalties: a bad credit rating, increased difficulty in obtaining loans, and higher interest rates are just a number of these. So it goes without saying, bankruptcy shouldn’t be taken lightly. There are a lot of debt consolidating companies that are happy to assist you, which is similar to bankruptcy as all your debts are merged into one. This is generally considered a viable alternative to bankruptcy as the financial penalties aren’t as severe. But the best way to find out if bankruptcy is the best solution for you is to ask for specialist advice from bankruptcy experts. In the meantime, however, here are some signs that your financial situation is in a critical condition and bankruptcy may be the best alternative for you.
If you don’t have any money in your bank account and you’re grappling with a mountain of debt, then bankruptcy may well be the best alternative for you. Even if you have the capacity to work a second job to increase your earnings, will this allow you to recover from your debts in the next 5 years? If no, then you should consider seeking professional advice about your scenario, as bankruptcy can be a desirable alternative. Filing for bankruptcy will relieve you of these debts and although there are financial penalties, 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 aggressively and you should really consider bankruptcy before your financial position gets worse. With no additional income, it can often take up to 30 years to repay your debts by making minimum repayments only, so all the interest you’ll be paying over these years can really amount to enormous sums of money. While you’ll still be paying off debts with interest after filing for bankruptcy, commonly you can negotiate 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 a sign that your financial situation is worsening and you will need to make some changes. When you’re being contacted by debt collectors, it means that your creditors have sold your debts at heavily discounted rates to debt collectors because they strongly believe that you aren’t in a situation to pay off these debts in an acceptable period of time. This is a clear indicator that you should honestly consider declaring bankruptcy as it’s probably the best option for both your finances and your emotional well-being.
Even though there are some severe financial consequences, bankruptcy isn’t the end of the world and in many cases, it’s the first step to financial freedom. When you’re being confronted by 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 discover what options you have. While there are many options available to help you in financial hardship, if you’re experiencing any of these 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 experiencing financial difficulties, it’s best to get in touch with bankruptcy professionals sooner rather than later. For a confidential discussion concerning your financial situation, contact Bankruptcy Experts Wangaratta on 1300 795 575 or visit www.bankruptcyexpertswangaratta.com.au