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Personal bankruptcy is never the preferred position to be in, however many individuals find relief in dealing with their financial troubles and starting over. No one is perfect, and people make mistakes. But a lot of people hold off filing for bankruptcy for far too long. They prefer to ignore the elephant in the room and spend years battling just to make ends meet. Yes, bankruptcy is never appealing and many individuals find it embarrassing, nevertheless 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 at bankruptcy, it’s important to understand the warning signs. Here are a few signs that you’re in serious financial distress.

Making minimum repayments only

One of the clearest signs of financial troubles is when you can only afford the minimum repayments on your loans, yet your salary isn’t increasing. Interest charges and fees will quickly 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 at some time. Obviously, it’s okay 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 fees 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. A large number of financial advisors suggest having three to six months of living expenses in a specialised bank account. This account should cover all your expenses for that time period: rent, food, petrol, bills. What would happen if you lose your job? Or you cannot work because of sickness? And if you’re buying luxury items while you have high interest loans remaining, 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 an useful way to pay for items by giving yourself a short-term loan, particularly in today’s cashless world. Commonly, there is an interest-free period of a month or two, but after this time, the interest rates and fees are extremely high. If you end up using credit cards to pay for bills due to the fact that you simply don’t have enough money, you’re on the brink of disaster. Some people will even have a number of credit cards so they can repay one with another. This is a key sign that you’re heading for personal bankruptcy. Credit cards can be quite harmful if used incorrectly. Paying bills with debt only brings about more debt, with big interest charges added on. If this sounds familiar, seek professional advice asap.

Debt collectors are contacting you

It may seem obvious, but if debt collectors are regularly harassing you on the phone or in the mail, you should think of bankruptcy help. Think about it this way; lenders who conclude that they aren’t able to recover their loan from you will sell your debt at a lower rate to debt collectors. If lenders have lost faith in your capability to pay your bills, there is undoubtedly a problem. If you’re frightened to answer the phone or open your mail as a result of debt collectors, it’s time to take action. You can only avoid those threatening phone calls and letters for so long before your quality of life starts to diminish. Pick up the phone and call the professionals, that’s what they’re there for.

Losing sleep

Are you so troubled about your financial future that you can’t sleep at night? This is likely the most significant warning sign that you’re steering towards bankruptcy. When your health and happiness are disintegrating because of your financial predicament, it’s time to realise 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. Speak to a bankruptcy expert to discover what options you have.

If you’re experiencing any of the above warning signs, chances are that you’re already in financial calamity and are heading towards bankruptcy if changes aren’t made. Personal insolvency is the final step in a long process, and normally there are options before you need file for bankruptcy. To find out what options you have, or to talk with someone about your financial condition, contact Bankruptcy Experts Gladstone on 1300 795 575 or visit