Personal bankruptcy is never the best situation to be in, however many individuals find relief in addressing their financial difficulties and starting afresh. No one is perfect, and people make mistakes. Yet a lot of people hold off filing for bankruptcy for far too long. They choose to ignore the elephant in the room and spend many years battling just to make ends meet. Yes, bankruptcy is never satisfying and lots of people find it embarrassing, nonetheless 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 considering bankruptcy, it’s important 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 isn’t increasing. Interest charges and fees will quickly 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 okay to have a balance on your credit card debt for a few months, but it’s critical that you think long-term. If you’re drowning 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 find that your savings are being used to make repayments on your loans, you’re heading for trouble. Most financial specialists highly recommend having three to six months of living expenses in a specialised bank account. This account should cover all of your expenses for that time period: rent, meals, transport, bills. What happens if you lose your job? Or you cannot work as a result of a health condition? And if you’re buying 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 a helpful way to pay for items by giving yourself a short-term loan, particularly in today’s cashless society. Typically, there is an interest-free period of a month or two, but after this time, the interest rates and fees are very high. If you find yourself using credit cards to pay for bills since you simply don’t have enough funds, you’re on the brink of disaster. Some people will even have various 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 really harmful if used improperly. Paying bills with debt only generates 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 appear to be obvious, but if debt collectors are regularly harassing you on the phone or in the mail, you should think about bankruptcy help. Consider it this way; creditors who believe that they cannot recoup their loan from you will sell your debt at a reduced rate to debt collectors. If creditors have lost faith in your capability to pay your bills, there is definitely a problem. If you’re scared to answer the phone or check your mail as a result of debt collectors, it’s time to act. You can only brush off those threatening phone calls and letters for so long before your quality of life starts to corrode. Pick up the phone and call the experts, that’s what they’re there for.

 

Losing sleep

 

Are you so upset about your financial future that you can’t sleep at night? This is most probably the greatest warning sign that you’re heading for bankruptcy. When your health and happiness are deteriorating as a result of your financial situation, 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. Consult with a bankruptcy expert to find out what options you have.

 

If you’re encountering any of the above warning signs, chances are that you’re already in financial calamity 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 speak with someone about your situation, contact Bankruptcy Experts Whitsundays on 1300 795 575 or visit http://www.bankruptcyexpertswhitsundays.com.au