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

If you’re struggling financially and thinking about bankruptcy, it’s relevant to identify 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 difficulties is when you can only afford the minimum repayments on your loans, yet your salary isn’t increasing. Interest charges and fees will soon 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 time. Naturally, 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 sinking 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 separate bank account. This account should cover all your expenses for that time frame: rent, food, transport, bills. What happens if you lose your job? Or cannot work because of a health condition? And if you’re buying luxury items while you have high interest loans overdue, 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 practical way to pay for items by giving yourself a short-term loan, particularly in today’s cashless world. Ordinarily, 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 end up using credit cards to pay for bills since you simply don’t have enough cash, you’re on the brink of disaster. Some people will even have several credit cards so they can repay one with another. This is a key sign that you’re steering towards personal bankruptcy. Credit cards can be very destructive if used wrongfully. Paying bills with debt only causes more debt, with big interest charges added on. If this sounds familiar, seek professional advice asap.

Debt collectors are contacting you

It may appear to be obvious, but if debt collectors are invariably harassing you on the phone or in the mail, you should contemplate bankruptcy help. Think of it this way; creditors who believe that they aren’t able to recoup their money from you will sell your debt at a discounted rate to debt collectors. If creditors have lost faith in your capacity to pay your bills, there is definitely a problem. If you’re scared to answer the phone or check your mail because 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 deteriorate. Pick up the phone and call the professionals, that’s what they’re there for.

Losing sleep

Are you so distressed about your financial future that you can’t sleep at night? This is likely the biggest warning sign that you’re steering towards bankruptcy. When your health and happiness are descending because of your financial situation, it’s time to acknowledge 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. Speak 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 presently 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 with someone about your situation, contact Bankruptcy Experts Newcastle on 1300 795 575 or visit