Personal bankruptcy is never the best predicament to be in, however lots of people find relief in confronting their financial problems and starting afresh. Nobody is perfect, and people make mistakes. Yet a lot of men and women avoid filing for bankruptcy for far too long. They prefer to ignore the elephant in the room and spend several years struggling just to make ends meet. Yes, bankruptcy is never enjoyable and many individuals find it embarrassing, 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 contemplating bankruptcy, it’s important to identify the warning signs. Here are a few 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 income isn’t increasing. Interest charges and fees will eventually force you to make a change, either by finding a second job or consolidating your loans. And if you don’t make a change, something must give eventually. Naturally, it’s okay to have a balance on your credit card debt for a few months, but it’s important that you think long-term. If you’re suffocating 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 advisors recommend having three to six months of living expenses in a specialised bank account. This account should cover all of your expenses for that time frame: rent, food, petrol, bills. What happens if you lose your job? Or you can’t work due to sickness? And if you’re buying 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 comfortable way to purchase items by giving yourself a short-term loan, particularly in today’s cashless society. Generally, there is an interest-free period of a month or two, but after this time, the interest rates and fees are remarkably high. If you find yourself using credit cards to pay for bills simply because you simply don’t have enough funds, you’re on the brink of disaster. Some people will even have several 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 poorly. 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 continuously plaguing you on the phone or in the mail, you should think about bankruptcy help. Imagine it this way; creditors who conclude that they can’t recoup their loan from you will sell your debt at a reduced rate to debt collectors. If lenders have lost faith in your capability to pay your bills, there is obviously a problem. If you’re scared to answer the phone or check your mail due to debt collectors, it’s time to take action. You can only avoid those threatening phone calls and letters for so long before your quality of life begins to languish. Pick up the phone and call the professionals, that’s what they’re there for.
Are you so nervous about your financial future that you can’t sleep at night? This is quite possibly the greatest warning sign that you’re heading for bankruptcy. When your health and happiness are languishing due to your financial predicament, 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, literally, the first step towards financial freedom. Consult with a bankruptcy expert to identify what options you have.
If you’re encountering any of the above warning signs, chances are that you’re presently 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 to someone about your financial condition, contact Bankruptcy Experts Wyong on 1300 795 575 or visit http://www.bankruptcyexpertswyong.com.au