Signs You May Want To Consider Bankruptcy
Personal bankruptcy is never the preferred situation to be in, however many people find relief in confronting their financial troubles and starting afresh. No one is perfect, and people make mistakes. Yet a lot of men and women hold off filing for bankruptcy for far too long. They would prefer 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 individuals find it humiliating, nonetheless 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 thinking about bankruptcy, it’s useful to acknowledge the warning signs. Here are a few signs that you’re in serious financial distress.
Making minimum repayments only
One of the clearest signs of financial challenges is when you can only afford the minimum repayments on your loans, yet your income source 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 at some time. Naturally, it’s fine to have a balance on your credit card debt for a few months, but it’s useful that you think long-term. If you’re sinking 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. Most financial experts advise having three to six months of living expenses in a specialised savings account. This account should cover all your expenses for that period of time: rent, food, transport, bills. What would happen if you lose your job? Or you can’t work as a result 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 practical way to purchase items by giving yourself a short-term loan, especially in today’s cashless world. Generally, there is an interest-free period of a month or two, but after this time, the interest rates and charges are extraordinarily high. If you find yourself using credit cards to pay for bills due to the fact that you simply don’t have enough money, 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 heading for personal bankruptcy. Credit cards can be very hazardous if used wrongfully. Paying bills with debt only brings about 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 about it this way; creditors who believe that they can’t recuperate their loan from you will sell your debt at a reduced rate to debt collectors. If creditors have lost faith in your ability to pay your bills, there is surely a problem. If you’re frightened to answer the phone or check your mail because of debt collectors, it’s time to take action. You can only ignore those threatening phone calls and letters for so long before your quality of life begins to suffer. Pick up the phone and call the professionals, that’s what they’re there for.
Are you so nervous about your financial future that you can’t sleep at night? This is likely the greatest warning sign that you’re moving towards bankruptcy. When your health and happiness are disintegrating due to your financial condition, 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, in fact, the first step towards financial freedom. Talk with a bankruptcy expert to identify what options you have.
If you’re encountering any of the above 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 usually there are options before you need file for bankruptcy. To find out what options you have, or to talk with someone about your situation, contact Bankruptcy Experts Ipswich on 1300 795 575 or visit http://www.bankruptcyexpertsipswich.com.au