Personal bankruptcy is never the ideal position to be in, however lots of individuals find relief in dealing with their financial issues and starting afresh. No one is perfect, and people make mistakes. But too many individuals avoid filing for bankruptcy for far too long. They prefer to ignore the elephant in the room and spend many years fighting just to make ends meet. Yes, bankruptcy is never pleasurable 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 contemplating bankruptcy, it’s necessary to understand the warning signs. Here are a few signs that you’re in serious financial trouble.

 

Making minimum repayments only

 

One of the clearest signs of financial problems is when you can only afford the minimum repayments on your loans, yet your source of income isn’t increasing. Interest charges and fees will shortly 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. Of course, it’s fine 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.

 

No savings

 

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. Most financial specialists recommend having three to six months of living expenses in a separate bank account. This account should cover all of your expenses for that time period: rent, food, transport, bills. What would happen if you lose your job? Or cannot work due to a health condition? And if you’re purchasing luxury items while you have high interest loans unsettled, you should really get your priorities straight. Without having 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 buy items by giving yourself a short-term loan, especially in today’s cashless world. Usually, there is an interest-free period of a month or two, but after this time, the interest rates and charges are extraordinarily high. If you end up using credit cards to pay for bills simply because 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 repay one with another. This is a key sign that you’re looking at personal bankruptcy. Credit cards can be considerably destructive if used incorrectly. Paying bills with debt only leads to more debt, with big interest charges added on. If this sounds familiar, seek professional advice immediately.

 

Debt collectors are getting in touch with you

 

It may seem to be obvious, but if debt collectors are continuously harassing you on the phone or in the mail, you should look at bankruptcy help. Imagine it this way; creditors who conclude that they cannot recuperate their loan from you will sell your debt at a discounted rate to debt collectors. If creditors have lost faith in your capacity to pay your bills, there is certainly a problem. If you’re frightened to answer the phone or check your mail due to debt collectors, it’s time to act. You can only neglect those threatening phone calls and letters for so long before your quality of life starts to deteriorate. Pick up the phone and call the specialists, that’s what they’re there for.

 

Losing sleep

 

Are you so concerned about your financial future that you can’t sleep at night? This is likely the most significant warning sign that you’re heading for bankruptcy. When your health and happiness are descending because of your financial situation, it’s time to realise 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 discover what options you have.

 

If you’re experiencing any of the above warning signs, chances are that you’re currently in financial trouble 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 financial condition, contact Bankruptcy Experts Australia on 1300 795 575 or visit http://www.bankruptcyexpertsaustralia.com.au

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