Personal bankruptcy is never the ideal position to be in, however many individuals find relief in confronting their financial problems and starting over. Nobody is perfect, and people make mistakes. Yet a lot of people put off filing for bankruptcy for far too long. They choose to ignore the elephant in the room and spend many years fighting just to make ends meet. Yes, bankruptcy is never enjoyable and many people find it embarrassing, however it is the very first step towards financial freedom. Always bear in mind that there is a life after bankruptcy.

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If you’re struggling financially and considering bankruptcy, it’s necessary to identify 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 challenges is when you can only afford the minimum repayments on your loans, yet your income source 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 eventually. Naturally, it’s alright 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 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. The majority of financial experts highly recommend having three to six months of living expenses in a separate 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 because of illness? And if you’re purchasing luxury items while you have high interest loans overdue, 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 convenient way to buy items by giving yourself a short-term loan, especially in today’s cashless society. Commonly, there is an interest-free period of a month or two, but after this time, the interest rates and charges are very 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 few 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 really hazardous if used incorrectly. Paying bills with debt only generates 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 invariably hassling you on the phone or in the mail, you should contemplate bankruptcy help. Think about it this way; creditors who believe that they can’t recuperate their money 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 certainly a problem. If you’re frightened to answer the phone or check your mail as a result of debt collectors, it’s time to act. You can only dismiss those threatening phone calls and letters for so long before your quality of life begins to languish. Pick up the phone and call the professionals, that’s what they’re there for.

Losing sleep

Are you so nervous about your financial future that you can’t sleep at night? This is quite possibly the most significant 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 acknowledge 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 to 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 distress 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 speak to someone about your financial condition, contact Bankruptcy Experts Rockingham on 1300 795 575 or visit