Personal bankruptcy is never the ideal predicament to be in, however many individuals find relief in addressing their financial issues and starting afresh. No one is perfect, and people make mistakes. But a lot of men and women avoid filing for bankruptcy for far too long. They choose to ignore the elephant in the room and spend several years fighting just to make ends meet. Yes, bankruptcy is never pleasing and lots of people find it humiliating, nonetheless 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 at bankruptcy, it’s relevant to understand the warning signs. Here are a couple of 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 source isn’t increasing. Interest charges and fees will eventually 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 eventually. Obviously, 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 find that your savings are being used to make repayments on your loans, you’re heading for trouble. A large number of financial specialists suggest having three to six months of living expenses in a specialised savings account. This account should cover all of your expenses for that time frame: rent, food, petrol, bills. What happens if you lose your job? Or you cannot work because of sickness? 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 bank account, personal insolvency may well become a reality.
Using credit cards to pay your bills.
Credit Cards are a comfortable way to purchase items by giving yourself a short-term loan, especially in today’s cashless world. Typically, there is an interest-free period of a month or two, but after this time, the interest rates and charges are extremely high. If you end up using credit cards to pay for bills since you simply don’t have enough funds, you’re on the brink of disaster. Some people will even have a couple of credit cards so they can pay off one with another. This is a key sign that you’re looking at personal bankruptcy. Credit cards can be very dangerous if used incorrectly. Paying bills with debt only results in more debt, with big interest charges added on. If this sounds familiar, seek professional advice immediately.
Debt collectors are calling you
It may seem obvious, but if debt collectors are constantly hassling you on the phone or in the mail, you should contemplate bankruptcy help. Think about it this way; creditors who believe that they aren’t able to recuperate their loan from you will sell your debt at a reduced rate to debt collectors. If lenders have lost faith in your capacity to pay your bills, there is undoubtedly a problem. If you’re afraid to answer the phone or check your mail because of debt collectors, it’s time to take action. You can only neglect those threatening phone calls and letters for so long before your quality of life begins to disintegrate. Pick up the phone and call the specialists, that’s what they’re there for.
Are you so distressed about your financial future that you can’t sleep at night? This is possibly the most significant warning sign that you’re steering towards bankruptcy. When your health and happiness are declining as a result of your financial position, 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, literally, the first step towards financial freedom. Speak with a bankruptcy expert to find out what options you have.
If you’re experiencing any of these warning signs, chances are that you’re presently in financial trouble and are heading towards bankruptcy if changes aren’t made. Personal insolvency is the final step in a long process, and commonly 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 Wangaratta on 1300 795 575 or visit http://www.bankruptcyexpertswangaratta.com.au