Personal bankruptcy is never the ideal position to be in, however lots of individuals find relief in dealing with their financial issues and starting over. No one is perfect, and people make mistakes. But too many men and women put off filing for bankruptcy for far too long. They choose to ignore the elephant in the room and spend many 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 keep in mind that there is a life after bankruptcy.
If you’re struggling financially and considering bankruptcy, it’s important to understand the warning signs. Here are a number of signs that you’re in serious financial trouble.
Making minimum repayments only
One of the clearest signs of financial complications is when you can only afford the minimum repayments on your loans, yet your income isn’t increasing. Interest charges and fees will quickly force you to make a change, either by acquiring a second job or consolidating your loans. And if you don’t make a change, something must give at some point. Needless to say, it’s fine to have a balance on your credit card debt for a few months, but it’s crucial that you think long-term. If you’re suffocating in interest fees 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. A large number of financial advisors strongly recommend having three to six months of living expenses in a separate bank account. This account should cover all of your expenses for that time period: rent, meals, transport, bills. What would happen if you lose your job? Or you cannot work because of illness? And if you’re buying luxury items while you have high interest loans unsettled, you should really get your priorities straight. Without 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 pay for items by giving yourself a short-term loan, especially in today’s cashless society. Typically, there is an interest-free period of a month or two, but after this time, the interest rates and charges are incredibly high. If you find yourself using credit cards to pay for bills due to the fact that you simply don’t have enough cash, you’re on the brink of disaster. Some people will even have a few 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 very harmful if used improperly. Paying bills with debt only generates more debt, with big interest charges added on. If this sounds familiar, seek professional advice as soon as possible.
Debt collectors are contacting you
It may seem to be obvious, but if debt collectors are frequently harassing you on the phone or in the mail, you should think of bankruptcy help. Think about it this way; creditors who conclude that they aren’t able to recover their loan from you will sell your debt at a discounted rate to debt collectors. If creditors have lost faith in your capacity to pay your bills, there is certainly a problem. If you’re frightened to answer the phone or open your mail due to debt collectors, it’s time to act. You can only brush off those threatening phone calls and letters for so long before your quality of life begins to languish. Pick up the phone and call the specialists, that’s what they’re there for.
Are you so anxious about your financial future that you can’t sleep at night? This is probably the greatest warning sign that you’re moving towards bankruptcy. When your health and happiness are disintegrating because of your financial predicament, 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, in truth, the first step towards financial freedom. Speak with a bankruptcy expert to identify 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 to someone about your situation, contact Bankruptcy Experts Emerald on 1300 795 575 or visit http://www.bankruptcyexpertsemerald.com.au