Signs You May Want To Consider Bankruptcy
Personal bankruptcy is never the preferred predicament to be in, however lots of people find relief in dealing with their financial difficulties and starting over. Nobody is perfect, and people make mistakes. Yet a lot of people put off filing for bankruptcy for far too long. They prefer to ignore the elephant in the room and spend many years struggling just to make ends meet. Yes, bankruptcy is never pleasant and lots of individuals find it humiliating, nonetheless 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 looking at bankruptcy, it’s necessary 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 troubles 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 working a second job or consolidating your loans. And if you don’t make a change, something must give eventually. Surely, it’s fine to have a balance on your credit card debt for a few months, but it’s critical 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 find that your savings are being used to make repayments on your loans, you’re heading for trouble. Most financial advisors strongly recommend having three to six months of living expenses in a specialised bank account. This account should cover all of your expenses for that period: rent, food, transport, bills. What happens if you lose your job? Or cannot work because of a health condition? 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 comfortable way to purchase items by giving yourself a short-term loan, particularly in today’s cashless world. Commonly, 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 find yourself using credit cards to pay for bills simply because 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 pay off one with another. This is a key sign that you’re steering towards personal bankruptcy. Credit cards can be very harmful if used improperly. Paying bills with debt only generates more debt, with big interest charges added on. If this sounds familiar, seek professional advice asap.
Debt collectors are contacting you
It may appear to be obvious, but if debt collectors are repeatedly plaguing you on the phone or in the mail, you should consider bankruptcy help. Think of it this way; creditors who feel that they aren’t able to recoup their money from you will sell your debt at a discounted rate to debt collectors. If lenders have lost faith in your ability to pay your bills, there is undeniably a problem. If you’re afraid to answer the phone or open 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 languish. Pick up the phone and call the professionals, that’s what they’re there for.
Are you so troubled about your financial future that you can’t sleep at night? This is likely the most significant warning sign that you’re moving towards bankruptcy. When your health and happiness are disintegrating due to your financial predicament, it’s time to realise 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. Talk with a bankruptcy expert to identify what options you have.
If you’re encountering any of these warning signs, chances are that you’re currently in financial distress 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 speak to someone about your financial condition, contact Bankruptcy Experts Tamworth on 1300 795 575 or visit http://www.bankruptcyexpertstamworth.com.au