Personal bankruptcy is never the best predicament to be in, however lots of people find relief in dealing with their financial difficulties and starting over. Nobody is perfect, and people make mistakes. But a lot of individuals avoid 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 appealing and many people find it humiliating, nevertheless 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 important to acknowledge 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 challenges 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 getting a second job or consolidating your loans. And if you don’t make a change, something must give at some point. Of course, it’s okay to have a balance on your credit card debt for a few months, but it’s critical that you think long-term. If you’re sinking 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 find that your savings are being used to make repayments on your loans, you’re heading for trouble. The majority of financial specialists strongly recommend having three to six months of living expenses in a dedicated bank account. This account should cover all your expenses for that period: rent, meals, petrol, bills. What happens if you lose your job? Or cannot work as a result of a health condition? 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 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 fees are extremely high. If you are using credit cards to pay for bills since you simply don’t have enough money, you’re on the brink of disaster. Some people will even have numerous credit cards so they can repay one with another. This is a key sign that you’re heading for personal bankruptcy. Credit cards can be rather harmful if used wrongfully. Paying bills with debt only brings about more debt, with big interest charges added on. If this sounds familiar, seek professional advice immediately.
Debt collectors are calling you
It may appear to be obvious, but if debt collectors are frequently hassling you on the phone or in the mail, you should look at bankruptcy help. Visualise it this way; lenders who believe that they cannot recoup their money from you will sell your debt at a discounted rate to debt collectors. If creditors have lost faith in your capability to pay your bills, there is obviously a problem. If you’re afraid to answer the phone or check your mail as a result of debt collectors, it’s time to take action. You can only overlook those threatening phone calls and letters for so long before your quality of life begins to deteriorate. 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 likely the greatest warning sign that you’re steering towards bankruptcy. When your health and happiness are deteriorating as a result 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, literally, the first step towards financial freedom. Talk with a bankruptcy expert to identify what options you have.
If you’re encountering any of these warning signs, chances are that you’re already in financial hardship 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 situation, contact Bankruptcy Experts Shepparton on 1300 795 575 or visit http://www.bankruptcyexpertsshepparton.com.au