Personal bankruptcy is never the best situation to be in, however many people find relief in confronting their financial problems and starting afresh. Nobody is perfect, and people make mistakes. But a lot of individuals 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 enjoyable and lots of individuals find it humiliating, nevertheless it is the very first step towards financial freedom. Always bear in mind 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 hardship.
Making minimum repayments only
One of the clearest signs of financial challenges 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 acquiring a second job or consolidating your loans. And if you don’t make a change, something must give at some point. Surely, it’s alright to have a balance on your credit card debt for a few months, but it’s useful that you think long-term. If you’re drowning 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. The majority of financial experts highly recommend having three to six months of living expenses in a specialised bank account. This account should cover all your expenses for that period of time: rent, meals, petrol, bills. What happens if you lose your job? Or you cannot work due to sickness? And if you’re purchasing luxury items while you have high interest loans overdue, 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. Commonly, there is an interest-free period of a month or two, but after this time, the interest rates and charges are very high. If you are using credit cards to pay for bills given that 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 repay one with another. This is a key sign that you’re looking at personal bankruptcy. Credit cards can be quite hazardous if used wrongfully. Paying bills with debt only results in more debt, with big interest charges added on. If this sounds familiar, seek professional advice asap.
Debt collectors are calling you
It may seem to be obvious, but if debt collectors are invariably plaguing you on the phone or in the mail, you should think about bankruptcy help. Visualise it this way; lenders who conclude that they cannot recover their money from you will sell your debt at a reduced rate to debt collectors. If creditors have lost faith in your capability to pay your bills, there is unquestionably a problem. If you’re scared to answer the phone or check your mail as a result of debt collectors, it’s time to take action. 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 professionals, that’s what they’re there for.
Are you so stressed about your financial future that you can’t sleep at night? This is quite possibly the greatest warning sign that you’re steering towards bankruptcy. When your health and happiness are suffering as a result of your financial situation, 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 to a bankruptcy expert to identify what options you have.
If you’re experiencing any of the above warning signs, chances are that you’re actively in financial distress 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 circumstances, contact Bankruptcy Experts Lismore on 1300 795 575 or visit http://www.bankruptcyexpertslismore.com.au