Is Bankruptcy My Best Alternative? How To Know If Bankruptcy Is Right For You

Experiencing financial hardship is a particularly stressful situation and unfortunately, millions of people throughout the world end up in this position each day. People in this predicament have numerous options to recover from their financial burdens, and bankruptcy should be regarded as a last resort when all other alternatives have been exhausted. You’ve quite possibly seen a couple of those debt consolidating companies advertise their services on TV for example. In the majority of cases, it can be complicated to try to work out an effective way to recover from financial hardships, and many will turn to bankruptcy simply because it seems to be the easiest way of doing so. But how do you know if bankruptcy is the right option for you? This article will shed some light into bankruptcy to help you evaluate if bankruptcy is the best option for your particular scenario.

Bankruptcy has some rather severe financial consequences: a bad credit rating, increased difficulty in securing loans, and higher interest rates are just a few of these. So needless to say, bankruptcy should never be taken lightly. There are an abundance of debt consolidating businesses that more than happy to assist you, which is similar to bankruptcy as all your debts are merged into one. This is usually considered a sensible alternative to bankruptcy as the financial penalties aren’t as extreme. But the best way to determine if bankruptcy is the best alternative for you is to ask for specialist advice from bankruptcy experts. In the meantime, however, here are some signs that your financial position is in a serious 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 grappling with a mountain of debt, then bankruptcy may well be the best solution for you. Even if you have the ability to work a second job to increase your cash flow, will this allow you to recover from your debts in the next 5 years? If no, then you should think about seeking professional advice about your scenario, as bankruptcy can be an attractive alternative. Filing for bankruptcy will relieve you of these debts and though there are financial consequences, 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 intensify rapidly and you should really consider bankruptcy before your situation worsens. With no 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 this time can certainly amount to considerable sums of money. Whilst you’ll still be repaying debts with interest after declaring bankruptcy, typically you can negotiate better terms on conditions on your debts after declaring bankruptcy.

Debt Collectors Are Calling You

When you’re being persistently hassled by debt collectors on the phone and in the mail, it’s an indicator that your financial condition is worsening 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 highly discounted prices to debt collectors because they believe that you aren’t in a situation to settle these debts in a reasonable period of time. This is a clear indication that you should honestly consider declaring bankruptcy as it’s probably the best solution for both your finances and your mental well-being.

Although 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 facing 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 alternatives available to assist you in financial hardship, if you’re familiar with any of the above warning signs then chances are that bankruptcy is the best alternative to ensure you and your family can secure a bright future. Regardless, if you’re encountering financial difficulties, it’s best to contact bankruptcy professionals sooner rather than later. For a confidential discussion regarding your financial scenario, contact Bankruptcy Experts on 1300 795 575 or visit