Personal bankruptcy is never the preferred position to be in, however many people find relief in confronting their financial problems and starting over. 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 years struggling just to make ends meet. Yes, bankruptcy is never pleasing and many individuals find it humiliating, however it is the very first step towards financial freedom. Always keep in mind that there is a life after bankruptcy.
If you’re struggling financially and looking at bankruptcy, it’s useful 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 difficulties 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 working a second job or consolidating your loans. And if you don’t make a change, something must give at some time. Needless to say, it’s fine 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 realise that your savings are being used to make repayments on your loans, you’re heading for trouble. A large number of financial advisors highly recommend having three to six months of living expenses in a separate savings account. This account should cover all your expenses for that time frame: rent, food, transport, bills. What happens if you lose your job? Or you cannot work as a result of a health condition? And if you’re buying 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 a handy way to pay for items by giving yourself a short-term loan, especially 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 charges are extremely high. If you find yourself using credit cards to pay for bills because you simply don’t have enough savings, you’re on the brink of disaster. Some people will even have a couple of 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 rather hazardous if used poorly. Paying bills with debt only causes 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 appear obvious, but if debt collectors are frequently plaguing you on the phone or in the mail, you should think of bankruptcy help. Think of it this way; lenders who feel 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 unquestionably a problem. If you’re scared to answer the phone or open your mail as a result of debt collectors, it’s time to take action. You can only ignore those threatening phone calls and letters for so long before your quality of life starts to deteriorate. Pick up the phone and call the specialists, that’s what they’re there for.
Are you so afraid about your financial future that you can’t sleep at night? This is quite possibly the most significant warning sign that you’re moving towards bankruptcy. When your health and happiness are suffering because of your financial position, 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 truth, the first step towards financial freedom. Talk 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 already 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 circumstances, contact Bankruptcy Experts Darwin on 1300 795 575 or visit http://www.bankruptcyexpertsdarwin.com.au