Experiencing financial hardship is a very stressful situation and unfortunately, millions of people around the world end up in this situation every year. People in this situation have many options to recover from their financial distress, and bankruptcy should be thought of as a last resort when all other alternatives have been exhausted. You’ve most likely seen a couple of those debt consolidating businesses offer their services on TV for example. In the majority of cases, it can be difficult to try to figure out an effective way to recover from financial difficulties, and many will file for bankruptcy simply because it appears to be the simplest way of doing so. But how do you know if bankruptcy is the right alternative for you? This article will shed some light into bankruptcy in order to help you figure out if bankruptcy is the best option for your individual circumstances.

 

Bankruptcy has some rather severe financial consequences: a bad credit history, increased difficulty in acquiring loans, and higher interest rates are just a few of these. So needless to say, bankruptcy should not be taken lightly. There are a lot of debt consolidating businesses that are happy to assist you, which is similar to bankruptcy as all your debts are consolidated into one. This is usually considered a good alternative to bankruptcy as the financial penalties aren’t as extreme. But the best way to figure out if bankruptcy is the best alternative for you is to ask for reliable advice from bankruptcy experts. In the meantime, however, here are some signs that your financial position is in a dangerous condition and bankruptcy may be the best option for you.

 

No Savings

 

If you don’t have any money in your bank and you’re dealing with a mountain of debt, then bankruptcy may well be the best alternative for you. Even if you’re able to work a second job to increase your earnings, will this allow you to recover from your debts in the next 5 years? If no, then you really should think of seeking professional advice about your situation, as bankruptcy can be a desirable alternative. Filing for bankruptcy will relieve you of these debts and even though there are financial penalties, it’s probably the best way to recover in this situation.

 

Making Minimum Repayments Only

 

If you can only afford to make the minimum repayments on your debts, then the interest on these debts will compound rapidly and you should really consider bankruptcy before your situation gets worse. With no supplementary 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 this time can truly amount to enormous sums of money. Even though you’ll still be paying off debts with interest after declaring bankruptcy, normally you can negotiate better terms on conditions on your debts after filing for bankruptcy.

 

Debt Collectors Are Calling You

 

When you’re being consistently hassled by debt collectors on the telephone and in the mail, it’s a sign that your financial position is deteriorating and you will 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 are convinced that you aren’t in a situation to pay off these debts in a reasonable time frame. This is a clear sign that you should seriously look at declaring bankruptcy as it’s very likely the best option for both your finances and your psychological well-being.

 

Whilst there are some severe financial implications, bankruptcy isn’t the end of the world and in most cases, it’s the first step to financial freedom. When you’re encountering 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 figure out what options you have. While there are many options available to help you in financial hardship, if you’re encountering any of the above warning signs then chances are that bankruptcy is the best alternative to ensure you and your family can secure a prosperous future. In any case, if you’re facing financial difficulties, it’s best to talk to bankruptcy professionals sooner rather than later. For a confidential discussion concerning your financial scenario, contact Bankruptcy Experts Gympie on 1300 795 575 or visit www.bankruptcyexpertsgympie.com.au