Personal bankruptcy is never the best situation to be in, however many individuals find relief in confronting their financial problems and starting over. Nobody is perfect, and people make mistakes. But too many individuals put off 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 pleasurable and lots of people find it humiliating, 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 into bankruptcy, it’s relevant to identify the warning signs. Here are a number of signs that you’re in serious financial hardship.

Making minimum repayments only

One of the clearest signs of financial difficulties 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 soon 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 point. Of course, it’s fine 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 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. The majority of financial experts advise having three to six months of living expenses in a dedicated savings account. This account should cover all of your expenses for that time period: rent, food, transport, bills. What happens if you lose your job? Or cannot work due to a health condition? And if you’re purchasing luxury items while you have high interest loans outstanding, you should really get your priorities straight. Without 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 a convenient way to purchase items by giving yourself a short-term loan, particularly in today’s cashless world. Often, 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 because you simply don’t have enough cash, you’re on the brink of disaster. Some people will even have various credit cards so they can pay off one with another. This is a key sign that you’re heading for personal bankruptcy. Credit cards can be quite detrimental if used poorly. Paying bills with debt only generates more debt, with big interest charges added on. If this sounds familiar, seek professional advice asap.

Debt collectors are getting in touch with you

It may appear to be obvious, but if debt collectors are regularly plaguing you on the phone or in the mail, you should consider bankruptcy help. Imagine it this way; creditors who conclude that they cannot recover their loan from you will sell your debt at a lower rate to debt collectors. If creditors have lost faith in your capacity to pay your bills, there is certainly a problem. If you’re scared to answer the phone or open your mail because of debt collectors, it’s time to act. You can only ignore those threatening phone calls and letters for so long before your quality of life starts to diminish. 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 quite possibly the most significant warning sign that you’re moving towards bankruptcy. When your health and happiness are disintegrating because of your financial predicament, it’s time to recognise 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 these warning signs, chances are that you’re actively in financial hardship 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 Brisbane on 1300 795 575 or visit