Is Bankruptcy My Best Alternative? How To Know If Bankruptcy Is Right For You

Bankruptcy Australia, Bankrupt, Bankruptcy Act, Insolvency, How to File for Bankruptcy

Experiencing financial hardship is a considerably stressful situation and unfortunately, millions of people across the world find themselves in this position each day. People in this situation have a number of options to recover from their financial burdens, and bankruptcy should be considered as a last resort when all other options have been exhausted. You’ve most likely seen a few of those debt consolidating businesses promote their services on TV for example. In many cases, it can be complicated to try to work out an effective way to recover from financial hardships, and many will file for bankruptcy simply because it seems to be the easiest way of doing so. But how do you know if bankruptcy is the right option for you? This article will shed some light into bankruptcy to help you evaluate if bankruptcy is the best option for your particular scenario.

Bankruptcy has some rather serious financial implications: a bad credit rating, increased difficulty in securing loans, and higher interest rates are just several of these. So it goes without saying, bankruptcy shouldn’t be taken lightly. There are plenty of debt consolidating businesses that are happy to help, which is similar to bankruptcy as all your debts are consolidated into one. This is normally considered a practical alternative to bankruptcy as the financial penalties aren’t as extreme. But the best way to identify if bankruptcy is the best solution for you is to seek specialist advice from bankruptcy experts. In the meantime, however, here are some signs that your financial situation is in a serious condition and bankruptcy may be the best alternative for you.

No Savings

If you don’t have any money in your bank and you’re experiencing a mountain of debt, then bankruptcy may well be the best option for you. Even if you have the capacity to work a second job to increase your income, will this allow you to recover from your debts in the next five years? If no, then you should look into seeking professional advice about your predicament, as bankruptcy can be a desirable alternative. Filing for bankruptcy will relieve you of these debts and although there are financial repercussions, it’s probably the best way to recover in this situation.

Making Minimum Repayments Only

If you can only manage to make the minimum repayments on your debts, then the interest on these debts will magnify aggressively and you should really consider bankruptcy before your financial issues gets worse. Without any additional income, it can often times take up to 30 years to repay your debts by making minimum repayments only, so all the interest you’ll be paying over these years can certainly amount to enormous sums of money. While you’ll still be paying off debts with interest after declaring bankruptcy, generally you can arrange better terms on conditions on your debts after declaring bankruptcy.

Debt Collectors Are Calling You

When you’re being persistently hassled by debt collectors on the telephone and in the mail, it’s an indicator that your financial situation is worsening and you need to make some changes. When you’re being contacted by debt collectors, it means that your creditors have sold your debts at heavily discounted rates to debt collectors because they feel that you aren’t in a situation to repay these debts in an acceptable time frame. This is a clear sign that you should honestly think about declaring bankruptcy as it’s most probably the best solution for both your finances and your psychological well-being.

Even though there are some serious financial consequences, bankruptcy isn’t the end of the world and in many cases, it’s the first step to financial freedom. When you’re confronting a mountain of debt and you can’t see any way of recovering in the near future, it’s time to seek professional advice to discover what options you have. While there are many alternatives available to help you in financial hardship, if you’re familiar with any of the above warning signs then chances are that bankruptcy is the best alternative to ensure you and your family can secure a bright future. Regardless, if you’re experiencing financial difficulties, it’s best to contact bankruptcy professionals sooner rather than later. For a confidential discussion about your financial situation, contact Bankruptcy Experts Australia on 1300 795 575 or visit Bankruptcy Australia

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