Going through financial hardship is a considerably stressful situation and sadly, millions of people throughout the world find themselves in this situation each day. People in this predicament have various options to recover from their financial problems, and bankruptcy should be considered as a last resort when all other options have been exhausted. You’ve most probably seen a few of those debt consolidating companies promote their services on TV for example. Often, it can be confusing to try to figure out an effective way to recover from financial problems, and many will file for bankruptcy simply because it seems to be the simplest way of doing so. But how do you know if bankruptcy is the right choice for you? This article will shed some light into bankruptcy to help you evaluate if bankruptcy is the best option for your specific situation.

Bankruptcy has some rather severe financial repercussions: a bad credit rating, increased difficulty in obtaining loans, and higher interest rates are just some of these. So needless to say, bankruptcy shouldn’t be taken lightly. There are an abundance of debt consolidating companies that are happy to help, which is similar to bankruptcy as all your debts are merged into one. This is normally considered a feasible alternative to bankruptcy as the financial penalties aren’t as severe. But the best way to identify if bankruptcy is the best solution 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 an acute condition and bankruptcy may be the best solution 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 solution for you. Even if you have the capacity to work a second job to increase your cash flow, will this enable you to recover from your debts in the next 5 years? If no, then you should consider seeking professional advice about your scenario, as bankruptcy can be a desirable alternative. Declaring bankruptcy will relieve you of these debts and though there are financial repercussions, 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 magnify rapidly and you should really consider bankruptcy before your financial situation decays further. Without any supplementary income, it can sometimes take up to 30 years to pay off your debts by making minimum repayments only, so all the interest you’ll be paying over these years can really amount to huge sums of money. Though you’ll still be repaying debts with interest after declaring bankruptcy, regularly you can arrange better terms on conditions on your debts after declaring bankruptcy.

Debt Collectors Are Calling You

When you’re being constantly hassled by debt collectors on the phone and in the mail, it’s a sign 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 settle these debts in a reasonable period of time. This is a clear indicator that you should seriously consider filing for bankruptcy as it’s perhaps the best solution for both your finances and your psychological well-being.

Whilst there are some severe 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 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 find out what options you have. While there are many options available to assist you in financial hardship, if you’re familiar with any of these warning signs then chances are that bankruptcy is the best alternative to ensure you and your family can secure a bright future. In any case, if you’re experiencing financial difficulties, it’s best to contact bankruptcy professionals sooner rather than later. For a confidential discussion regarding your financial circumstances, contact Bankruptcy Experts Rockingham on 1300 795 575 or visit www.bankruptcyexpertsrockingham.com.au