Personal bankruptcy is never the ideal predicament to be in, however many people find relief in dealing with their financial difficulties and starting over. No one is perfect, and people make mistakes. But a lot of individuals hold 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 pleasing and many people 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 important to recognise 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 problems is when you can only afford the minimum repayments on your loans, yet your salary isn’t increasing. Interest charges and fees will soon 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. Naturally, it’s alright 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 realise that your savings are being used to make repayments on your loans, you’re heading for trouble. A large number of financial specialists highly recommend having three to six months of living expenses in a specialised 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 cannot work due to a health condition? And if you’re purchasing luxury items while you have high interest loans overdue, you should really get your priorities straight. Without having 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 comfortable way to buy items by giving yourself a short-term loan, particularly in today’s cashless world. Typically, there is an interest-free period of a month or two, but after this time, the interest rates and charges are particularly high. If you find yourself using credit cards to pay for bills due to the fact that you simply don’t have enough money, you’re on the brink of disaster. Some people will even have a number of credit cards so they can pay off one with another. This is a key sign that you’re steering towards personal bankruptcy. Credit cards can be considerably dangerous if used wrongfully. Paying bills with debt only brings about more debt, with big interest charges added on. If this sounds familiar, seek professional advice immediately.
Debt collectors are phoning you
It may seem to be obvious, but if debt collectors are continuously hassling you on the phone or in the mail, you should consider bankruptcy help. Think about it this way; creditors who feel that they aren’t able to recuperate their loan from you will sell your debt at a lower rate to debt collectors. If lenders have lost faith in your capacity to pay your bills, there is most certainly a problem. If you’re frightened to answer the phone or open your mail as a result of 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 languish. Pick up the phone and call the experts, that’s what they’re there for.
Are you so worried about your financial future that you can’t sleep at night? This is probably the biggest warning sign that you’re steering towards bankruptcy. When your health and happiness are disintegrating as a result of your financial predicament, it’s time to recognise 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. Talk with a bankruptcy expert to find out 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 with someone about your circumstances, contact Bankruptcy Experts Dandenong on 1300 795 575 or visit http://www.bankruptcyexpertsdandenong.com.au