Personal bankruptcy is never the preferred position to be in, however many individuals find relief in addressing their financial difficulties and starting over. Nobody is perfect, and people make mistakes. Yet too many men and women hold off 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 satisfying and lots of people 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 looking at bankruptcy, it’s necessary to understand the warning signs. Here are a couple of signs that you’re in serious financial trouble.
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 source of income isn’t increasing. Interest charges and fees will eventually 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 eventually. Surely, it’s alright to have a balance on your credit card debt for a few months, but it’s necessary 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 find that your savings are being used to make repayments on your loans, you’re heading for trouble. A large number of financial experts highly recommend having three to six months of living expenses in a separate savings account. This account should cover all of your expenses for that period of time: rent, food, petrol, bills. What would happen if you lose your job? Or you can’t work as a result of illness? And if you’re buying luxury items while you have high interest loans outstanding, you should really get your priorities straight. Without having 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 practical way to pay for items by giving yourself a short-term loan, especially in today’s cashless society. Commonly, there is an interest-free period of a month or two, but after this time, the interest rates and fees are incredibly high. If you find yourself using credit cards to pay for bills since you simply don’t have enough funds, you’re on the brink of disaster. Some people will even have a few credit cards so they can repay one with another. This is a key sign that you’re looking at personal bankruptcy. Credit cards can be quite destructive if used poorly. Paying bills with debt only causes more debt, with big interest charges added on. If this sounds familiar, seek professional advice immediately.
Debt collectors are getting in touch with you
It may seem obvious, but if debt collectors are frequently plaguing you on the phone or in the mail, you should think of bankruptcy help. Think of it this way; creditors who conclude that they can’t recoup 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 undoubtedly a problem. If you’re frightened to answer the phone or check your mail as a result of debt collectors, it’s time to take action. You can only dismiss 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 troubled about your financial future that you can’t sleep at night? This is most probably the most significant warning sign that you’re heading for bankruptcy. When your health and happiness are declining because 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. Speak to a bankruptcy expert to discover what options you have.
If you’re encountering any of the above warning signs, chances are that you’re already in financial calamity 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 to someone about your financial condition, contact Bankruptcy Experts Mildura on 1300 795 575 or visit http://www.bankruptcyexpertsmildura.com.au