|March 28, 2017||0|
Personal bankruptcy is never the ideal position to be in, however many people find relief in confronting their financial difficulties and starting over. No one is perfect, and people make mistakes. But too many men and women hold off filing for bankruptcy for far too long. They prefer to ignore the elephant in the room and spend many years struggling just to make ends meet. Yes, bankruptcy is never enjoyable and lots of individuals find it embarrassing, 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 useful to identify 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 troubles 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 working a second job or consolidating your loans. And if you don’t make a change, something must give eventually. Needless to say, it’s alright to have a balance on your credit card debt for a few months, but it’s necessary 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 realise that your savings are being used to make repayments on your loans, you’re heading for trouble. The majority of financial advisors recommend having three to six months of living expenses in a dedicated bank account. This account should cover all of your expenses for that time period: rent, meals, transport, bills. What would happen if you lose your job? Or you cannot work as a result of sickness? And if you’re purchasing luxury items while you have high interest loans unsettled, 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 an useful way to purchase items by giving yourself a short-term loan, particularly in today’s cashless world. Typically, 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 end up using credit cards to pay for bills because you simply don’t have enough money, you’re on the brink of disaster. Some people will even have several credit cards so they can repay one with another. This is a key sign that you’re steering towards personal bankruptcy. Credit cards can be considerably hazardous if used wrongfully. Paying bills with debt only generates 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 constantly plaguing you on the phone or in the mail, you should contemplate bankruptcy help. Imagine it this way; lenders who conclude that they can’t recover their loan from you will sell your debt at a reduced rate to debt collectors. If lenders have lost faith in your capability to pay your bills, there is obviously a problem. If you’re frightened to answer the phone or open your mail because of debt collectors, it’s time to take action. You can only neglect those threatening phone calls and letters for so long before your quality of life begins to deteriorate. Pick up the phone and call the professionals, that’s what they’re there for.
Are you so upset about your financial future that you can’t sleep at night? This is likely the biggest warning sign that you’re steering towards bankruptcy. When your health and happiness are disintegrating because of your financial predicament, it’s time to recognise 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 with a bankruptcy expert to identify what options you have.
If you’re encountering any of the above warning signs, chances are that you’re already in financial trouble 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 situation, contact Fresh Start Solutions Canberra on 1300 818 575 or visit http://freshstartsolutions.com.au/bankruptcy-canberra