Personal bankruptcy is never the preferred position to be in, however lots of individuals find relief in confronting their financial issues and starting afresh. Nobody is perfect, and people make mistakes. But a lot of individuals avoid filing for bankruptcy for far too long. They choose to ignore the elephant in the room and spend several years fighting just to make ends meet. Yes, bankruptcy is never pleasant and lots of individuals find it humiliating, nevertheless 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 useful to understand the warning signs. Here are a couple of signs that you’re in serious financial distress.
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 income isn’t increasing. Interest charges and fees will soon force you to make a change, either by getting a second job or consolidating your loans. And if you don’t make a change, something must give eventually. Needless to say, it’s okay to have a balance on your credit card debt for a few months, but it’s crucial 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 find that your savings are being used to make repayments on your loans, you’re heading for trouble. The majority of financial experts suggest having three to six months of living expenses in a dedicated bank account. This account should cover all of your expenses for that period of time: rent, meals, petrol, bills. What would happen if you lose your job? Or you cannot work due to sickness? And if you’re purchasing 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 convenient way to buy items by giving yourself a short-term loan, particularly in today’s cashless world. Normally, there is an interest-free period of a month or two, but after this time, the interest rates and fees are extremely high. If you end up using credit cards to pay for bills simply because you simply don’t have enough money, you’re on the brink of disaster. Some people will even have a few credit cards so they can pay off one with another. This is a key sign that you’re looking at personal bankruptcy. Credit cards can be very destructive if used wrongfully. Paying bills with debt only results in more debt, with big interest charges added on. If this sounds familiar, seek professional advice asap.
Debt collectors are calling you
It may seem obvious, but if debt collectors are invariably plaguing you on the phone or in the mail, you should think of bankruptcy help. Visualise it this way; lenders who believe that they can’t recover their money from you will sell your debt at a reduced rate to debt collectors. If lenders have lost faith in your ability to pay your bills, there is most certainly a problem. If you’re afraid to answer the phone or check your mail due to debt collectors, it’s time to act. You can only overlook those threatening phone calls and letters for so long before your quality of life begins to suffer. Pick up the phone and call the specialists, that’s what they’re there for.
Are you so nervous about your financial future that you can’t sleep at night? This is probably the biggest warning sign that you’re moving towards bankruptcy. When your health and happiness are suffering because of your financial position, 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, in truth, the first step towards financial freedom. Speak with a bankruptcy expert to discover what options you have.
If you’re experiencing any of these 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 circumstances, contact Bankruptcy Experts Toowoomba on 1300 795 575 or visit http://www.bankruptcyexpertstoowoomba.com.au