Is Bankruptcy My Best Option? How To Know If Bankruptcy Is Right For You
06
June
2017

 

Going through financial hardship is a particularly stressful situation and sadly, millions of people around the world end up in this situation each day. People in this scenario have quite a few options to recover from their financial woes, and bankruptcy should be regarded as a last resort when all other options have been exhausted. You’ve most likely seen several of those debt consolidating companies promote their services on television for example. In many cases, it can be confusing to try to work out the best way to recover from financial struggles, and many will turn to bankruptcy simply because it seems the simplest way of doing so. But how do you know if bankruptcy is the right alternative for you? This article will shed some light into bankruptcy to help you evaluate if bankruptcy is the best option for your specific situation.

Bankruptcy has some fairly severe financial repercussions: a bad credit rating, increased difficulty in acquiring loans, and higher interest rates are just some of these. So needless to say, bankruptcy should never be taken lightly. There are many debt consolidating businesses that more than happy to assist you, which is similar to bankruptcy as all your debts are merged into one. This is generally considered a viable alternative to bankruptcy as the financial penalties aren’t as extreme. But the best way to determine if bankruptcy is the best solution for you is to seek specialist advice from bankruptcy experts. In the meantime, however, here are some indications that your financial position is in a serious condition and bankruptcy may be the best solution for you.

No Savings

If you don’t have any savings in the bank and you’re grappling with a mountain of debt, then bankruptcy may well be the best alternative for you. Even if youcan manage to work a second job to increase your income, will this enable you to recover from your debts in the next 5 years? If no, then you should consider seeking professional advice about your situation, as bankruptcy can be an attractive alternative. Declaring bankruptcy will relieve you of these debts and although there are financial penalties, it’s probably the best way to recover in this situation.

Making Minimum Repayments Only

If you can only afford to make the minimum repayments on your debts, then the interest on these debts will compound quickly and you should really consider bankruptcy before your financial position decays further. With no additional income, it can often times take up to 30 years to repay your debts by making minimum repayments only, so all the interest you’ll be paying over these years can certainly amount to enormous sums of money. Whilst you’ll still be paying off debts with interest after declaring bankruptcy, typically you can negotiate better terms on conditions on your debts after filing for bankruptcy.

Debt Collectors Are Calling You

When you’re being continually hassled by debt collectors on the telephone and in the mail, it’s a sign that your financial scenario is worsening and you will need to make some changes. When you’re being contacted by debt collectors, it means that your creditors have sold your debts at highly discounted rates to debt collectors because they believe that you aren’t in a situation to repay these debts in a reasonable period of time. This is a clear indicator that you should seriously look at declaring bankruptcy as it’s most likely the best option for both your finances and your emotional well-being.

Though there are some severe financial consequences, bankruptcy isn’t the end of the world and in many cases, it’s the first step to financial freedom. When you’re encountering a mountain of debt and you can’t see any way of recovering in the near future, it’s time to seek professional advice to determine what options you have. While there are many alternatives available to assist you in financial hardship, if you’re familiar with any of the above warning signs then chances are that bankruptcy is the best alternative to ensure you and your family can secure a prosperous future. In any case, if you’re facing financial difficulties, it’s best to contact bankruptcy professionals sooner rather than later. For a confidential discussion regarding your financial circumstances, contact Bankruptcy Experts Toowoomba on 1300 795 575 or visit www.bankruptcyexpertstoowoomba.com.au

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