Personal bankruptcy is never the best predicament to be in, however many individuals find relief in addressing their financial issues and starting afresh. No one is perfect, and people make mistakes. But a lot of people hold off filing for bankruptcy for far too long. They choose to ignore the elephant in the room and spend years struggling just to make ends meet. Yes, bankruptcy is never pleasing and many people find it humiliating, nevertheless 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 looking at bankruptcy, it’s relevant to identify 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 complications is when you can only afford the minimum repayments on your loans, yet your salary 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 at some time. Of course, it’s okay to have a balance on your credit card debt for a few months, but it’s important 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 realise that your savings are being used to make repayments on your loans, you’re heading for trouble. A large number of financial specialists suggest having three to six months of living expenses in a specialised savings account. This account should cover all of your expenses for that time period: rent, food, petrol, bills. What would happen if you lose your job? Or you cannot work as a result of illness? 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 bank account, personal insolvency may well become a reality.
Using credit cards to pay your bills.
Credit Cards are a helpful way to buy items by giving yourself a short-term loan, particularly in today’s cashless world. Usually, there is an interest-free period of a month or two, but after this time, the interest rates and charges are exceptionally 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 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 poorly. Paying bills with debt only leads to more debt, with big interest charges added on. If this sounds familiar, seek professional advice immediately.
Debt collectors are contacting you
It may seem to be obvious, but if debt collectors are regularly harassing you on the phone or in the mail, you should look at bankruptcy help. Think of it this way; creditors who believe that they can’t recover their loan from you will sell your debt at a lower rate to debt collectors. If creditors have lost faith in your capability to pay your bills, there is surely a problem. If you’re scared to answer the phone or open your mail because of debt collectors, it’s time to take action. You can only overlook those threatening phone calls and letters for so long before your quality of life starts 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 probably the greatest warning sign that you’re moving towards bankruptcy. When your health and happiness are deteriorating due to your financial predicament, 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, literally, the first step towards financial freedom. Talk with a bankruptcy expert to find out what options you have.
If you’re experiencing any of these warning signs, chances are that you’re currently 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 with someone about your circumstances, contact Bankruptcy Experts Gold Coast on 1300 879 867 or visit http://www.bankruptcyexpertsgoldcoast.com.au