Experiencing financial hardship is a pretty stressful situation and sadly, millions of people across the globe find themselves in this position every year. Individuals in this predicament have quite a few options to recover from their financial woes, and bankruptcy should be thought of as a last resort when all other options have been exhausted. You’ve most likely seen some of those debt consolidating companies offer their services on TV for example. Often, it can be confusing to try to figure out ways to recover from financial struggles, 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 in order to help you determine if bankruptcy is the best option for your personal circumstances.
Bankruptcy has some fairly severe financial repercussions: a bad credit rating, increased difficulty in obtaining loans, and higher interest rates are just several of these. So it goes without saying, bankruptcy should not be taken lightly. There are a number of debt consolidating companies that more than happy to help, which is similar to bankruptcy as all your debts are merged into one. This is generally considered a practical alternative to bankruptcy as the financial penalties aren’t as severe. But the best way to identify if bankruptcy is the best option for you is to ask for reliable advice from bankruptcy experts. In the meantime, however, here are some signs that your financial situation is in a dangerous condition and bankruptcy may be the best solution for you.
If you don’t have any money in your bank account and you’re dealing 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 enable you to recover from your debts in the next five years? If no, then you really should consider seeking professional advice about your predicament, as bankruptcy can be a desirable alternative. Filing for bankruptcy will relieve you of these debts and while 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 compound aggressively and you should really consider bankruptcy before your condition gets worse. With no extra 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 certainly amount to significant sums of money. Although you’ll still be paying off debts with interest after filing for bankruptcy, normally 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 telephone and in the mail, it’s a sign that your financial situation is deteriorating and you have to make some changes. When you’re being contacted by debt collectors, it means that your creditors have sold your debts at heavily discounted prices to debt collectors because they believe that you aren’t in a situation to settle these debts in a reasonable time frame. This is a clear indication that you should honestly consider declaring bankruptcy as it’s most probably the best solution for both your finances and your mental well-being.
Though there are some serious financial implications, bankruptcy isn’t the end of the world and in many cases, it’s the first step to financial freedom. When you’re being confronted by 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 identify what options you have. While there are many alternatives available to help you in financial hardship, if you’re experiencing any of these warning signs then chances are that bankruptcy is the best alternative to ensure you and your family can secure a prosperous future. In any case, if you’re facing financial difficulties, it’s best to talk to bankruptcy professionals sooner rather than later. For a confidential discussion regarding your financial situation, contact Bankruptcy Advice on 1300 879 867 or visit www.bankruptcy-advice.com.au/