Personal bankruptcy is never the preferred predicament to be in, however lots of individuals find relief in addressing their financial issues and starting afresh. No one is perfect, and people make mistakes. But too many people put off filing for bankruptcy for far too long. They would prefer to ignore the elephant in the room and spend several years fighting just to make ends meet. Yes, bankruptcy is never pleasant and many individuals find it humiliating, nevertheless it is the very first step towards financial freedom. Always keep in mind that there is a life after bankruptcy.

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If you’re struggling financially and looking at bankruptcy, it’s important to understand the warning signs. Here are a couple of signs that you’re in serious financial trouble.

Making minimum repayments only

One of the clearest signs of financial complications is when you can only afford the minimum repayments on your loans, yet your income isn’t increasing. Interest charges and fees will eventually 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 eventually. Obviously, it’s alright 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.

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. A large number of financial advisors recommend having three to six months of living expenses in a specialised bank account. This account should cover all your expenses for that period of time: rent, food, transport, bills. What would happen if you lose your job? Or can’t work as a result of illness? And if you’re buying luxury items while you have high interest loans remaining, 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 an useful way to buy items by giving yourself a short-term loan, especially in today’s cashless society. Normally, there is an interest-free period of a month or two, but after this time, the interest rates and charges are particularly high. If you end up 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 repay one with another. This is a key sign that you’re steering towards personal bankruptcy. Credit cards can be rather detrimental if used improperly. Paying bills with debt only generates more debt, with big interest charges added on. If this sounds familiar, seek professional advice as soon as possible.

Debt collectors are contacting you

It may appear obvious, but if debt collectors are repeatedly harassing you on the phone or in the mail, you should think of bankruptcy help. Consider it this way; lenders who feel that they cannot recuperate their money from you will sell your debt at a lower rate to debt collectors. If creditors 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 as a result of 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 disintegrate. Pick up the phone and call the specialists, that’s what they’re there for.

Losing sleep

Are you so anxious about your financial future that you can’t sleep at night? This is possibly the greatest 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 truth, the first step towards financial freedom. Talk with a bankruptcy expert to identify what options you have.

If you’re experiencing any of these warning signs, chances are that you’re currently in financial calamity and are heading towards bankruptcy if changes aren’t made. Personal insolvency is the final step in a long process, and usually 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 Bankruptcy Experts Gympie on 1300 795 575 or visit