Personal bankruptcy is never the ideal predicament to be in, however lots of individuals find relief in confronting their financial problems and starting afresh. No one is perfect, and people make mistakes. Yet too many individuals avoid filing for bankruptcy for far too long. They prefer to ignore the elephant in the room and spend many years fighting just to make ends meet. Yes, bankruptcy is never satisfying and lots of people find it embarrassing, however it is the very first step towards financial freedom. Always keep in mind that there is a life after bankruptcy.

If you’re struggling financially and looking into bankruptcy, it’s necessary to acknowledge the warning signs. Here are a number of signs that you’re in serious financial trouble.

Making minimum repayments only

One of the clearest signs of financial problems 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 finding 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 imperative 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 find that your savings are being used to make repayments on your loans, you’re heading for trouble. Most financial advisors suggest having three to six months of living expenses in a specialised savings account. This account should cover all of your expenses for that time frame: rent, meals, transport, bills. What happens if you lose your job? Or cannot work as a result of a health condition? And if you’re buying luxury items while you have high interest loans overdue, 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 pay for items by giving yourself a short-term loan, especially in today’s cashless world. Normally, there is an interest-free period of a month or two, but after this time, the interest rates and fees are particularly high. If you are using credit cards to pay for bills considering that you simply don’t have enough funds, 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 rather precarious 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 getting in touch with you

It may appear to be obvious, but if debt collectors are continually harassing you on the phone or in the mail, you should think about bankruptcy help. Imagine it this way; lenders who believe that they cannot recuperate their loan from you will sell your debt at a discounted rate to debt collectors. If creditors 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 due to debt collectors, it’s time to act. You can only overlook those threatening phone calls and letters for so long before your quality of life starts to suffer. Pick up the phone and call the specialists, that’s what they’re there for.

Losing sleep

Are you so upset about your financial future that you can’t sleep at night? This is perhaps the greatest warning sign that you’re moving towards bankruptcy. When your health and happiness are disintegrating because of your financial predicament, it’s time to accept that you need help simply to improve your quality of life. Bankruptcy is not the end of the world, and is, literally, the first step towards financial freedom. Talk with a bankruptcy expert to find out what options you have.

If you’re experiencing any of the above warning signs, chances are that you’re actively 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 talk to someone about your situation, contact Bankruptcy Experts on 1300 795 575 or visit