Personal bankruptcy is never the ideal situation to be in, however lots of individuals find relief in dealing with their financial problems and starting over. Nobody is perfect, and people make mistakes. Yet a lot of individuals hold off filing for bankruptcy for far too long. They choose to ignore the elephant in the room and spend years fighting just to make ends meet. Yes, bankruptcy is never pleasant and many individuals 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 identify the warning signs. Here are a few signs that you’re in serious financial hardship.

Making minimum repayments only

One of the clearest signs of financial challenges 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 quickly 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 at some point. Of course, 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 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 realise that your savings are being used to make repayments on your loans, you’re heading for trouble. A large number of financial specialists strongly recommend having three to six months of living expenses in a dedicated savings account. This account should cover all your expenses for that time frame: rent, food, transport, bills. What happens if you lose your job? Or can’t work as a result of a health condition? And if you’re purchasing 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 savings account, personal insolvency may well become a reality.

Using credit cards to pay your bills.

Credit Cards are a practical way to buy items by giving yourself a short-term loan, especially in today’s cashless world. Usually, there is an interest-free period of a month or two, but after this time, the interest rates and charges are particularly high. If you end up using credit cards to pay for bills given that you simply don’t have enough funds, you’re on the brink of disaster. Some people will even have a couple 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 considerably destructive 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 phoning you

It may seem obvious, but if debt collectors are constantly hassling you on the phone or in the mail, you should look at bankruptcy help. Think of it this way; creditors who feel that they can’t recuperate their loan from you will sell your debt at a reduced rate to debt collectors. If creditors have lost faith in your ability to pay your bills, there is definitely a problem. If you’re afraid to answer the phone or check your mail as a result of debt collectors, it’s time to act. You can only avoid those threatening phone calls and letters for so long before your quality of life starts to deteriorate. Pick up the phone and call the professionals, that’s what they’re there for.

Losing sleep

Are you so anxious about your financial future that you can’t sleep at night? This is probably the greatest warning sign that you’re heading for bankruptcy. When your health and happiness are languishing because of your financial circumstances, 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 fact, the first step towards financial freedom. Consult 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 hardship 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 circumstances, contact Bankruptcy Experts Tweed Coast on 1300 795 575 or visit