Personal bankruptcy is never the preferred predicament to be in, however lots of people find relief in dealing with their financial difficulties and starting afresh. No one is perfect, and people make mistakes. But a lot of people put off filing for bankruptcy for far too long. They choose to ignore the elephant in the room and spend years battling just to make ends meet. Yes, bankruptcy is never pleasant and many individuals find it humiliating, however 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 considering bankruptcy, it’s necessary to recognise 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 complications is when you can only afford the minimum repayments on your loans, yet your source of income isn’t increasing. Interest charges and fees will shortly 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 eventually. Of course, 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 sinking 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. The majority of financial advisors strongly recommend having three to six months of living expenses in a dedicated savings account. This account should cover all your expenses for that time period: rent, food, transport, bills. What happens if you lose your job? Or you can’t work as a result of sickness? And if you’re purchasing luxury items while you have high interest loans unsettled, 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 a handy way to buy items by giving yourself a short-term loan, particularly in today’s cashless world. Generally, 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 are 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 several credit cards so they can pay off one with another. This is a key sign that you’re looking at personal bankruptcy. Credit cards can be considerably detrimental if used poorly. Paying bills with debt only creates more debt, with big interest charges added on. If this sounds familiar, seek professional advice asap.
Debt collectors are contacting you
It may appear to be obvious, but if debt collectors are regularly harassing you on the phone or in the mail, you should think about bankruptcy help. Imagine it this way; lenders who believe that they aren’t able to recuperate 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 certainly a problem. If you’re afraid 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 starts to corrode. Pick up the phone and call the specialists, that’s what they’re there for.
Are you so nervous about your financial future that you can’t sleep at night? This is most probably the biggest warning sign that you’re moving towards bankruptcy. When your health and happiness are declining as a result of your financial situation, it’s time to realise 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. Speak with a bankruptcy expert to discover what options you have.
If you’re encountering any of the above warning signs, chances are that you’re actively in financial hardship and are heading towards bankruptcy if changes aren’t made. Personal insolvency is the final step in a long process, and usually there are options before you need file for bankruptcy. To find out what options you have, or to speak to someone about your circumstances, contact Bankruptcy Experts Cairns on 1300 795 575 or visit http://www.bankruptcyexpertscairns.com.au