Is Bankruptcy My Best Alternative? How To Know If Bankruptcy Is Right For You

Experiencing financial hardship is a considerably stressful situation and sadly, millions of people around the world end up in this position every day. Individuals in this scenario have a number of options to recover from their financial issues, and bankruptcy should be regarded as a last resort when all other options have been exhausted. You’ve possibly seen a few of those debt consolidating businesses offer their services on television for example. In the majority of cases, it can be overwhelming to try to find out how to recover from financial struggles, and many will declare bankruptcy simply because it seems to be the easiest way of doing so. But how do you know if bankruptcy is the right option for you? This article will shed some light into bankruptcy in order to help you evaluate if bankruptcy is the best option for your individual circumstances.

Bankruptcy has some rather serious financial consequences: a bad credit history, increased difficulty in obtaining loans, and higher interest rates are just some of these. So it goes without saying, bankruptcy should never be taken lightly. There are many debt consolidating businesses that are happy to assist you, which is similar to bankruptcy as all your debts are combined into one. This is often considered a good alternative to bankruptcy as the financial penalties aren’t as serious. But the best way to determine if bankruptcy is the best solution for you is to seek reliable advice from bankruptcy experts. In the meantime, however, here are some signs that your financial situation is in an acute condition and bankruptcy may be the best solution for you.

No Savings

If you don’t have any savings in the bank and you’re dealing with a mountain of debt, then bankruptcy may well be the best option for you. Even if youcan manage to work a second job to increase your income, will this enable you to recover from your debts in the next 5 years? If no, then you should look into seeking professional advice about your predicament, as bankruptcy can be a feasible alternative. Declaring bankruptcy will relieve you of these debts and whilst there are financial penalties, it’s probably the best way to recover in this situation.

Making Minimum Repayments Only

If you can only manage to make the minimum repayments on your debts, then the interest on these debts will intensify rapidly and you should really consider bankruptcy before your financial situation gets worse. Without any extra income, it can often take up to 30 years to settle your debts by making minimum repayments only, so all the interest you’ll be paying over this time can certainly amount to large sums of money. Whilst you’ll still be paying off debts with interest after declaring bankruptcy, typically you can negotiate better terms on conditions on your debts after declaring bankruptcy.

Debt Collectors Are Calling You

When you’re being regularly hassled by debt collectors on the phone and in the mail, it’s a sign that your financial position is worsening and you will need to make some changes. When you’re being contacted by debt collectors, it means that your creditors have sold your debts at heavily discounted rates to debt collectors because they are convinced that you aren’t in a position to settle these debts in a reasonable time frame. This is a clear indicator that you should honestly consider filing for bankruptcy as it’s probably the best option for both your finances and your psychological well-being.

Whilst there are some serious financial repercussions, bankruptcy isn’t the end of the world and in most cases, it’s the first step to financial freedom. When you’re experiencing a mountain of debt and you can’t see any way of recovering in the near future, it’s time to seek professional advice to find out what options you have. While there are many alternatives available to help you in financial hardship, if you’re encountering any of the above warning signs then chances are that bankruptcy is the best alternative to ensure you and your family can secure a bright future. Regardless, if you’re encountering financial difficulties, it’s best to talk to bankruptcy professionals sooner rather than later. For a confidential discussion concerning your financial scenario, contact Bankruptcy Experts Melbourne on 1300 795 575 or visit www.bankruptcyexpertsmelbourne.com.au

Recent Posts