|March 27, 2017||Comments Closed|
Personal bankruptcy is never the preferred situation to be in, however many people find relief in dealing with their financial difficulties and starting over. Nobody is perfect, and people make mistakes. But a lot of people put off filing for bankruptcy for far too long. They prefer to ignore the elephant in the room and spend several years struggling just to make ends meet. Yes, bankruptcy is never pleasing and lots of people find it humiliating, nonetheless it is the very first step towards financial freedom. Always keep in mind that there is a life after bankruptcy.
If you’re struggling financially and looking into bankruptcy, it’s necessary 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 difficulties is when you can only afford the minimum repayments on your loans, yet your income source isn’t increasing. Interest charges and fees will soon force you to make a change, either by finding a second job or consolidating your loans. And if you don’t make a change, something must give at some time. Needless to say, it’s alright 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 suffocating 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. A large number of financial advisors recommend having three to six months of living expenses in a specialised savings account. This account should cover all of your expenses for that period of time: rent, meals, transport, bills. What happens if you lose your job? Or can’t work as a result of illness? And if you’re purchasing luxury items while you have high interest loans overdue, 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 convenient way to pay for items by giving yourself a short-term loan, particularly 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 charges are incredibly high. If you find yourself using credit cards to pay for bills due to the fact that you simply don’t have enough savings, you’re on the brink of disaster. Some people will even have a couple of 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 very dangerous if used poorly. Paying bills with debt only results in more debt, with big interest charges added on. If this sounds familiar, seek professional advice immediately.
Debt collectors are contacting you
It may appear to be obvious, but if debt collectors are regularly plaguing you on the phone or in the mail, you should consider bankruptcy help. Consider it this way; creditors who conclude that they aren’t able to recover their money from you will sell your debt at a lower rate to debt collectors. If lenders have lost faith in your capability to pay your bills, there is certainly a problem. If you’re frightened to answer the phone or open your mail because of 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 starts to diminish. Pick up the phone and call the specialists, that’s what they’re there for.
Are you so stressed about your financial future that you can’t sleep at night? This is most probably the most significant warning sign that you’re moving towards bankruptcy. When your health and happiness are languishing because of your financial position, it’s time to acknowledge that you need help simply to improve your quality of life. Bankruptcy is not the end of the world, and is, in truth, the first step towards financial freedom. Speak to a bankruptcy expert to identify what options you have.
If you’re encountering 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 speak to someone about your circumstances, contact Bankruptcy Experts Mount Isa on 1300 795 575 or visit http://www.bankruptcyexpertsmountisa.com.au