Personal bankruptcy is never the preferred predicament to be in, however many individuals find relief in dealing with their financial troubles and starting afresh. No one is perfect, and people make mistakes. Yet too many people hold off filing for bankruptcy for far too long. They would prefer to ignore the elephant in the room and spend several years struggling just to make ends meet. Yes, bankruptcy is never pleasing and lots of individuals find it embarrassing, however it is the very first step towards financial freedom. Always remember that there is a life after bankruptcy.

If you’re struggling financially and contemplating bankruptcy, it’s important to acknowledge 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 difficulties is when you can only afford the minimum repayments on your loans, yet your income isn’t increasing. Interest charges and fees will eventually force you to make a change, either by getting a second job or consolidating your loans. And if you don’t make a change, something must give at some time. Naturally, 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 experts advise having three to six months of living expenses in a separate bank account. This account should cover all of your expenses for that period: rent, food, petrol, bills. What happens if you lose your job? Or you cannot work due to illness? And if you’re buying 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 savings account, personal insolvency may well become a reality.

Using credit cards to pay your bills.

Credit Cards are a comfortable way to purchase items by giving yourself a short-term loan, particularly in today’s cashless world. Generally, there is an interest-free period of a month or two, but after this time, the interest rates and charges are incredibly high. If you find yourself using credit cards to pay for bills since you simply don’t have enough money, 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 considerably dangerous 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 phoning you

It may seem obvious, but if debt collectors are constantly hassling you on the phone or in the mail, you should think of bankruptcy help. Think about it this way; creditors who believe that they can’t recoup their loan from you will sell your debt at a discounted rate to debt collectors. If lenders have lost faith in your capacity to pay your bills, there is most certainly a problem. If you’re afraid to answer the phone or open your mail as a result 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 corrode. Pick up the phone and call the professionals, that’s what they’re there for.

Losing sleep

Are you so concerned 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 suffering as a result of your financial condition, 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, literally, the first step towards financial freedom. Talk to a bankruptcy expert to find out what options you have.

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