Signs You May Want To Consider Bankruptcy
Personal bankruptcy is never the ideal situation to be in, however lots of people find relief in confronting their financial issues and starting afresh. No one is perfect, and people make mistakes. Yet too many men and women hold off filing for bankruptcy for far too long. They choose to ignore the elephant in the room and spend years struggling just to make ends meet. Yes, bankruptcy is never pleasurable and many people find it embarrassing, 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 considering bankruptcy, it’s relevant to understand the warning signs. Here are a number of signs that you’re in serious financial distress.
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 soon force you to make a change, either by getting 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 okay 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 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. 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 period: rent, meals, petrol, bills. What happens if you lose your job? Or can’t work because of illness? And if you’re purchasing luxury items while you have high interest loans outstanding, 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 practical way to buy items by giving yourself a short-term loan, particularly in today’s cashless society. Often, there is an interest-free period of a month or two, but after this time, the interest rates and charges are remarkably high. If you find yourself using credit cards to pay for bills due to the fact that you simply don’t have enough funds, you’re on the brink of disaster. Some people will even have numerous 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 precarious if used improperly. Paying bills with debt only generates more debt, with big interest charges added on. If this sounds familiar, seek professional advice asap.
Debt collectors are contacting you
It may seem to be obvious, but if debt collectors are invariably hassling you on the phone or in the mail, you should think about bankruptcy help. Think about it this way; creditors who feel that they cannot recuperate their money 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 definitely a problem. If you’re frightened to answer the phone or check 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 starts to diminish. Pick up the phone and call the professionals, that’s what they’re there for.
Are you so afraid about your financial future that you can’t sleep at night? This is perhaps the most significant warning sign that you’re heading for bankruptcy. When your health and happiness are diminishing due to your financial position, 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 to a bankruptcy expert to discover what options you have.
If you’re experiencing any of these warning signs, chances are that you’re already in financial trouble 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 financial condition, contact Bankruptcy Experts Canberra on 1300 795 575 or visit http://www.bankruptcyexpertscanberra.com.au