Personal bankruptcy is never the preferred position to be in, however lots of individuals find relief in confronting their financial problems and starting afresh. No one is perfect, and people make mistakes. But a lot of men and women avoid 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 pleasing and many individuals find it embarrassing, 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 considering bankruptcy, it’s useful to recognise 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 challenges 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 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 point. Surely, 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 suffocating 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. Most financial experts advise having three to six months of living expenses in a separate bank account. This account should cover all your expenses for that period of time: rent, meals, transport, bills. What happens if you lose your job? Or you can’t work as a result of a health condition? And if you’re buying luxury items while you have high interest loans remaining, you should really get your priorities straight. Without three to six months of living expenses in your bank account, personal insolvency may well become a reality.
Using credit cards to pay your bills.
Credit Cards are a convenient way to pay for items by giving yourself a short-term loan, especially in today’s cashless society. Ordinarily, there is an interest-free period of a month or two, but after this time, the interest rates and fees are very high. If you are using credit cards to pay for bills due to the fact that you simply don’t have enough savings, you’re on the brink of disaster. Some people will even have various credit cards so they can pay off one with another. This is a key sign that you’re heading for personal bankruptcy. Credit cards can be rather dangerous if used poorly. Paying bills with debt only leads to 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 repeatedly harassing you on the phone or in the mail, you should think of bankruptcy help. Imagine it this way; lenders who feel that they aren’t able to recoup their money from you will sell your debt at a lower rate to debt collectors. If creditors have lost faith in your ability to pay your bills, there is obviously 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 begins to deteriorate. Pick up the phone and call the specialists, that’s what they’re there for.
Are you so troubled about your financial future that you can’t sleep at night? This is possibly the biggest warning sign that you’re heading for bankruptcy. When your health and happiness are declining as a result of your financial condition, it’s time to acknowledge 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. Speak to a bankruptcy expert to find out what options you have.
If you’re experiencing any of the above 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 Frankston on 1300 795 575 or visit http://www.bankruptcyexpertsfrankston.com.au