Personal bankruptcy is never the ideal situation to be in, however lots of people find relief in addressing their financial troubles and starting over. No one is perfect, and people make mistakes. But too many individuals avoid 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 pleasurable and many individuals find it humiliating, nonetheless it is the very first step towards financial freedom. Always remember that there is a life after bankruptcy.

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If you’re struggling financially and looking into bankruptcy, it’s important to understand the warning signs. Here are a couple of signs that you’re in serious financial hardship.


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 source of income isn’t increasing. Interest charges and fees will shortly force you to make a change, either by acquiring a second job or consolidating your loans. And if you don’t make a change, something must give at some time. Obviously, it’s fine to have a balance on your credit card debt for a few months, but it’s crucial that you think long-term. If you’re sinking 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. 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 of your expenses for that time period: rent, meals, transport, bills. What happens if you lose your job? Or you can’t work due to illness? And if you’re purchasing luxury items while you have high interest loans remaining, 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 purchase items by giving yourself a short-term loan, especially in today’s cashless society. Normally, there is an interest-free period of a month or two, but after this time, the interest rates and fees 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 cash, 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 really destructive if used incorrectly. Paying bills with debt only causes 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 seem obvious, but if debt collectors are repeatedly plaguing you on the phone or in the mail, you should consider bankruptcy help. Think of it this way; creditors who conclude that they can’t recuperate their money from you will sell your debt at a discounted rate to debt collectors. If lenders have lost faith in your ability to pay your bills, there is undeniably a problem. If you’re frightened to answer the phone or check your mail as a result of debt collectors, it’s time to take action. You can only neglect those threatening phone calls and letters for so long before your quality of life begins to suffer. Pick up the phone and call the experts, that’s what they’re there for.


Losing sleep


Are you so worried about your financial future that you can’t sleep at night? This is most probably the most significant warning sign that you’re moving towards bankruptcy. When your health and happiness are declining as a result of your financial position, 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, in truth, the first step towards financial freedom. Speak with 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 trouble and are heading towards bankruptcy if changes aren’t made. Personal insolvency is the final step in a long process, and commonly 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 Wagga Wagga on 1300 818 575 or visit