Signs You May Want To Consider Bankruptcy
Personal bankruptcy is never the ideal situation to be in, however many individuals find relief in addressing their financial difficulties and starting over. Nobody is perfect, and people make mistakes. But too many individuals put off filing for bankruptcy for far too long. They choose to ignore the elephant in the room and spend several years battling just to make ends meet. Yes, bankruptcy is never appealing and many individuals find it humiliating, however it is the very first step towards financial freedom. Always remember that there is a life after bankruptcy.
If you’re struggling financially and thinking about bankruptcy, it’s relevant to acknowledge 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 difficulties 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. Obviously, 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 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. Most financial experts advise having three to six months of living expenses in a separate savings account. This account should cover all of your expenses for that time frame: rent, food, petrol, bills. What would happen if you lose your job? Or you cannot work because of illness? 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 purchase items by giving yourself a short-term loan, especially in today’s cashless society. Normally, 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 are using credit cards to pay for bills considering that 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 heading for personal bankruptcy. Credit cards can be rather harmful if used incorrectly. Paying bills with debt only results in more debt, with big interest charges added on. If this sounds familiar, seek professional advice as soon as possible.
Debt collectors are phoning you
It may seem obvious, but if debt collectors are frequently hassling you on the phone or in the mail, you should look at bankruptcy help. Consider it this way; creditors who conclude that they aren’t able to recover their money from you will sell your debt at a discounted rate to debt collectors. If creditors have lost faith in your ability to pay your bills, there is obviously a problem. If you’re frightened to answer the phone or check your mail because of debt collectors, it’s time to take action. You can only brush off those threatening phone calls and letters for so long before your quality of life begins to disintegrate. Pick up the phone and call the specialists, that’s what they’re there for.
Are you so upset about your financial future that you can’t sleep at night? This is probably the greatest warning sign that you’re moving towards bankruptcy. When your health and happiness are declining because of your financial circumstances, 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. Consult with 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 already in financial trouble and are heading towards bankruptcy if changes aren’t made. Personal insolvency is the final step in a long process, and normally there are options before you need file for bankruptcy. To find out what options you have, or to speak with someone about your situation, contact Bankruptcy Experts Geelong on 1300 795 575 or visit http://www.bankruptcyexpertsgeelong.com.au