|March 28, 2017||0|
Personal bankruptcy is never the best predicament to be in, however lots of people find relief in addressing their financial troubles and starting afresh. No one is perfect, and people make mistakes. But a lot of individuals put off filing for bankruptcy for far too long. They would prefer to ignore the elephant in the room and spend years battling just to make ends meet. Yes, bankruptcy is never appealing and lots of people find it humiliating, however 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 relevant to understand the warning signs. Here are a number of signs that you’re in serious financial hardship.
Making minimum repayments only
One of the clearest signs of financial challenges is when you can only afford the minimum repayments on your loans, yet your income source isn’t increasing. Interest charges and fees will quickly force you to make a change, either by getting a second job or consolidating your loans. And if you don’t make a change, something must give at some time. Obviously, it’s fine 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 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 realise that your savings are being used to make repayments on your loans, you’re heading for trouble. The majority of financial advisors suggest having three to six months of living expenses in a dedicated bank account. This account should cover all of your expenses for that period of time: rent, meals, petrol, bills. What happens if you lose your job? Or you cannot work because of sickness? And if you’re buying luxury items while you have high interest loans remaining, 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 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 charges are exceptionally high. If you are using credit cards to pay for bills since you simply don’t have enough cash, 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 looking at personal bankruptcy. Credit cards can be considerably destructive 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 asap.
Debt collectors are getting in touch with you
It may seem obvious, but if debt collectors are repeatedly harassing you on the phone or in the mail, you should contemplate bankruptcy help. Think of it this way; creditors who believe that they cannot recover their loan from you will sell your debt at a lower rate to debt collectors. If lenders have lost faith in your capacity to pay your bills, there is obviously a problem. If you’re scared to answer the phone or check your mail because of debt collectors, it’s time to take action. You can only dismiss those threatening phone calls and letters for so long before your quality of life begins to deteriorate. Pick up the phone and call the specialists, that’s what they’re there for.
Are you so distressed about your financial future that you can’t sleep at night? This is possibly the biggest warning sign that you’re steering towards bankruptcy. When your health and happiness are suffering as a result of your financial position, 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 fact, the first step towards financial freedom. Speak with 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 distress and are heading towards bankruptcy if changes aren’t made. Personal insolvency is the final step in a long process, and normally 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 Fresh Start Solutions Darwin on 1300 818 575 or visit https://freshstartsolutions.com.au/bankruptcy-darwin