Personal bankruptcy is never the ideal predicament to be in, however many individuals find relief in confronting their financial difficulties and starting afresh. No one 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 several years struggling just to make ends meet. Yes, bankruptcy is never pleasurable and many people find it humiliating, 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 thinking about bankruptcy, it’s necessary to identify the warning signs. Here are a few signs that you’re in serious financial trouble.
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 isn’t increasing. Interest charges and fees will eventually force you to make a change, either by working 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 necessary 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 experts advise having three to six months of living expenses in a dedicated bank account. This account should cover all of your expenses for that period of time: rent, meals, petrol, bills. What happens if you lose your job? Or you can’t work as a result of illness? 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 savings account, personal insolvency may well become a reality.
Using credit cards to pay your bills.
Credit Cards are a comfortable way to buy items by giving yourself a short-term loan, especially in today’s cashless world. Normally, there is an interest-free period of a month or two, but after this time, the interest rates and fees are particularly high. If you find yourself using credit cards to pay for bills considering 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 considerably hazardous if used incorrectly. Paying bills with debt only causes more debt, with big interest charges added on. If this sounds familiar, seek professional advice asap.
Debt collectors are getting in touch with you
It may appear obvious, but if debt collectors are continually harassing you on the phone or in the mail, you should contemplate bankruptcy help. Imagine it this way; lenders who feel that they aren’t able to recover their loan 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 frightened to answer the phone or open your mail due to debt collectors, it’s time to take action. You can only dismiss those threatening phone calls and letters for so long before your quality of life begins to corrode. Pick up the phone and call the professionals, that’s what they’re there for.
Are you so worried about your financial future that you can’t sleep at night? This is most probably the most significant warning sign that you’re steering towards bankruptcy. When your health and happiness are disintegrating as a result of your financial predicament, 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, in truth, the first step towards financial freedom. Speak to a bankruptcy expert to discover what options you have.
If you’re experiencing any of these warning signs, chances are that you’re currently in financial calamity 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 circumstances, contact Bankruptcy Experts Port Stephens on 1300 795 575 or visit http://www.bankruptcyexpertsportstephens.com.au