When You Want To Consider Bankruptcy

Personal bankruptcy is never the ideal situation to be in, however lots of people find relief in addressing their financial problems and starting afresh. Nobody is perfect, and people make mistakes. But a lot of men and women avoid filing for bankruptcy for far too long. They prefer to ignore the elephant in the room and spend years fighting just to make ends meet. Yes, bankruptcy is never satisfying and many individuals find it humiliating, however 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 contemplating bankruptcy, it’s relevant 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 complications 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 acquiring a second job or consolidating your loans. And if you don’t make a change, something must give at some point. Obviously, it’s alright to have a balance on your credit card debt for a few months, but it’s crucial 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.

No savings

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 bank account. This account should cover all of your expenses for that time frame: rent, food, petrol, bills. What happens if you lose your job? Or you can’t work because of a health condition? And if you’re purchasing luxury items while you have high interest loans outstanding, 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 handy way to pay for items by giving yourself a short-term loan, especially in today’s cashless world. Normally, there is an interest-free period of a month or two, but after this time, the interest rates and fees are extraordinarily high. If you find yourself using credit cards to pay for bills considering that you simply don’t have enough cash, you’re on the brink of disaster. Some people will even have numerous 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 quite dangerous if used improperly. 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 contacting you

It may seem obvious, but if debt collectors are constantly plaguing you on the phone or in the mail, you should contemplate bankruptcy help. Consider it this way; creditors who believe that they can’t recuperate their money from you will sell your debt at a discounted rate to debt collectors. If lenders have lost faith in your capability to pay your bills, there is unquestionably a problem. If you’re afraid to answer the phone or check your mail due to debt collectors, it’s time to act. You can only avoid those threatening phone calls and letters for so long before your quality of life begins to suffer. Pick up the phone and call the experts, that’s what they’re there for.

Losing sleep

Are you so afraid about your financial future that you can’t sleep at night? This is likely the biggest warning sign that you’re moving towards bankruptcy. When your health and happiness are suffering because of your financial position, 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. Consult with a bankruptcy expert to discover what options you have.

If you’re experiencing any of these warning signs, chances are that you’re currently in financial hardship 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 financial condition, contact Bankruptcy Experts Melbourne on 1300 795 575 or visit http://www.bankruptcyexpertsmelbourne.com.au


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