Personal bankruptcy is never the preferred position to be in, however many people find relief in addressing their financial troubles and starting over. No one is perfect, and people make mistakes. Yet too many people put off filing for bankruptcy for far too long. They choose to ignore the elephant in the room and spend years fighting just to make ends meet. Yes, bankruptcy is never pleasing and lots of individuals find it embarrassing, however 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 contemplating bankruptcy, it’s relevant to acknowledge 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 source of income isn’t increasing. Interest charges and fees will eventually force you to make a change, either by finding a second job or consolidating your loans. And if you don’t make a change, something must give at some time. Naturally, it’s fine 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 drowning 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. A large number of financial experts strongly recommend having three to six months of living expenses in a separate savings account. This account should cover all your expenses for that time frame: rent, food, transport, bills. What happens if you lose your job? Or cannot work because of a health condition? And if you’re buying luxury items while you have high interest loans unsettled, 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 handy way to buy items by giving yourself a short-term loan, particularly in today’s cashless society. Typically, there is an interest-free period of a month or two, but after this time, the interest rates and charges are remarkably high. If you find yourself using credit cards to pay for bills because you simply don’t have enough funds, you’re on the brink of disaster. Some people will even have several 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 improperly. Paying bills with debt only creates more debt, with big interest charges added on. If this sounds familiar, seek professional advice asap.
Debt collectors are getting in touch with you
It may appear to be obvious, but if debt collectors are continuously plaguing you on the phone or in the mail, you should think about bankruptcy help. Consider it this way; lenders who feel that they cannot recuperate their money from you will sell your debt at a discounted rate to debt collectors. If creditors have lost faith in your capacity to pay your bills, there is surely a problem. If you’re afraid to answer the phone or check your mail because of debt collectors, it’s time to act. You can only neglect those threatening phone calls and letters for so long before your quality of life starts to diminish. Pick up the phone and call the specialists, that’s what they’re there for.
Are you so stressed 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 languishing as a result of your financial position, it’s time to accept 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. Consult with a bankruptcy expert to identify what options you have.
If you’re experiencing any of the above warning signs, chances are that you’re presently in financial distress and are heading towards bankruptcy if changes aren’t made. Personal insolvency is the final step in a long process, and usually there are options before you need file for bankruptcy. To find out what options you have, or to talk to someone about your situation, contact Bankruptcy Experts Dubbo on 1300 795 575 or visit http://www.bankruptcyexpertsdubbo.com.au