Personal bankruptcy is never the ideal predicament to be in, however many people find relief in confronting their financial issues and starting afresh. Nobody is perfect, and people make mistakes. But too many people hold off filing for bankruptcy for far too long. They choose to ignore the elephant in the room and spend several years battling just to make ends meet. Yes, bankruptcy is never satisfying and many individuals find it embarrassing, 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 into bankruptcy, it’s important to acknowledge the warning signs. Here are a few signs that you’re in serious financial hardship.
Making minimum repayments only
One of the clearest signs of financial difficulties is when you can only afford the minimum repayments on your loans, yet your income isn’t increasing. Interest charges and fees will shortly force you to make a change, either by acquiring 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 imperative that you think long-term. If you’re suffocating 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. A large number of financial advisors strongly recommend 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, meals, petrol, bills. What happens if you lose your job? Or you cannot work due to a health condition? And if you’re purchasing luxury items while you have high interest loans overdue, 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 an useful way to purchase 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 very high. If you end up using credit cards to pay for bills since you simply don’t have enough money, you’re on the brink of disaster. Some people will even have numerous 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 precarious 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 calling you
It may appear obvious, but if debt collectors are constantly hassling you on the phone or in the mail, you should think about bankruptcy help. Think of it this way; lenders who conclude that they aren’t able to recover their money from you will sell your debt at a reduced rate to debt collectors. If lenders have lost faith in your ability to pay your bills, there is obviously a problem. If you’re scared to answer the phone or check your mail due to debt collectors, it’s time to act. You can only overlook those threatening phone calls and letters for so long before your quality of life begins to corrode. Pick up the phone and call the specialists, that’s what they’re there for.
Are you so anxious about your financial future that you can’t sleep at night? This is perhaps the biggest warning sign that you’re steering towards bankruptcy. When your health and happiness are declining as a result of your financial condition, 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 to a bankruptcy expert to identify what options you have.
If you’re encountering any of these warning signs, chances are that you’re actively 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 to someone about your circumstances, contact Gold Coast Bankruptcy Centre on 1300 795 575 or visit http://www.goldcoastbankruptcycentre.com.au