Personal bankruptcy is never the ideal situation to be in, however many people find relief in addressing their financial issues and starting over. No one is perfect, and people make mistakes. But a lot of individuals avoid filing for bankruptcy for far too long. They choose to ignore the elephant in the room and spend many years struggling just to make ends meet. Yes, bankruptcy is never pleasing and many people find it humiliating, however it is the very first step towards financial freedom. Always remember that there is a life after bankruptcy.

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If you’re struggling financially and looking at bankruptcy, it’s necessary 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 difficulties is when you can only afford the minimum repayments on your loans, yet your salary isn’t increasing. Interest charges and fees will eventually force you to make a change, either by working a second job or consolidating your loans. And if you don’t make a change, something must give at some time. Needless to say, it’s alright to have a balance on your credit card debt for a few months, but it’s useful that you think long-term. If you’re sinking 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 specialists 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, food, transport, bills. What would happen if you lose your job? Or cannot work due to 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 bank 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, particularly in today’s cashless society. Usually, there is an interest-free period of a month or two, but after this time, the interest rates and charges are exceptionally high. If you find yourself using credit cards to pay for bills due to the fact that 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 pay off one with another. This is a key sign that you’re looking at personal bankruptcy. Credit cards can be rather precarious if used improperly. Paying bills with debt only creates 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 think of bankruptcy help. Visualise it this way; creditors who believe that they can’t recoup their loan from you will sell your debt at a reduced rate to debt collectors. If lenders have lost faith in your capability to pay your bills, there is definitely a problem. If you’re afraid to answer the phone or check your mail as a result of debt collectors, it’s time to take action. You can only avoid those threatening phone calls and letters for so long before your quality of life begins to suffer. Pick up the phone and call the specialists, that’s what they’re there for.

Losing sleep

Are you so distressed about your financial future that you can’t sleep at night? This is likely the biggest warning sign that you’re moving towards bankruptcy. When your health and happiness are languishing due to your financial condition, it’s time to acknowledge that you need help simply to improve your quality of life. Bankruptcy is not the end of the world, and is, in fact, the first step towards financial freedom. Speak to a bankruptcy expert to discover what options you have.

If you’re encountering any of these warning signs, chances are that you’re presently in financial hardship and are heading towards bankruptcy if changes aren’t made. Personal insolvency is the final step in a long process, and commonly there are options before you need file for bankruptcy. To find out what options you have, or to talk to someone about your situation, contact Bankruptcy Experts Albury on 1300 795 575 or visit