Signs You May Want To Consider Bankruptcy
Personal bankruptcy is never the ideal position to be in, however lots of people find relief in dealing with their financial issues and starting afresh. Nobody is perfect, and people make mistakes. But a lot of individuals avoid filing for bankruptcy for far too long. They prefer 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 bear in mind that there is a life after bankruptcy.
If you’re struggling financially and thinking about bankruptcy, it’s useful to acknowledge 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 complications 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 time. Obviously, it’s alright to have a balance on your credit card debt for a few months, but it’s imperative 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 find that your savings are being used to make repayments on your loans, you’re heading for trouble. Most financial experts recommend having three to six months of living expenses in a dedicated savings account. This account should cover all of your expenses for that period of time: rent, food, petrol, bills. What happens if you lose your job? Or you cannot work due to illness? 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 savings account, personal insolvency may well become a reality.
Using credit cards to pay your bills.
Credit Cards are an useful way to purchase items by giving yourself a short-term loan, especially in today’s cashless society. Usually, there is an interest-free period of a month or two, but after this time, the interest rates and fees are extraordinarily high. If you find yourself using credit cards to pay for bills given that you simply don’t have enough cash, you’re on the brink of disaster. Some people will even have a number of 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 quite dangerous if used incorrectly. Paying bills with debt only brings about 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 obvious, but if debt collectors are continuously harassing you on the phone or in the mail, you should think of bankruptcy help. Think about it this way; creditors who believe that they cannot recoup their money from you will sell your debt at a lower rate to debt collectors. If lenders have lost faith in your ability to pay your bills, there is certainly a problem. If you’re scared 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 disintegrate. Pick up the phone and call the experts, that’s what they’re there for.
Are you so concerned about your financial future that you can’t sleep at night? This is probably the biggest warning sign that you’re moving towards bankruptcy. When your health and happiness are disintegrating due to your financial situation, it’s time to accept that you need help simply to improve your quality of life. Bankruptcy is not the end of the world, and is, in fact, the first step towards financial freedom. Talk with a bankruptcy expert to identify what options you have.
If you’re experiencing any of these warning signs, chances are that you’re actively in financial calamity 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 talk with someone about your situation, contact Bankruptcy Experts Bunbury on 1300 795 575 or visit http://www.bankruptcyexpertsbunbury.com.au