Going through financial hardship is a pretty stressful situation and sadly, millions of individuals around the world find themselves in this situation every day. Individuals in this situation have numerous options to recover from their financial issues, and bankruptcy should be regarded as a last resort when all other options have been exhausted. You’ve quite possibly seen a couple of those debt consolidating companies offer their services on TV for example. Often, it can be difficult to try to work out ways to recover from financial challenges, and many will declare bankruptcy simply because it seems the easiest way of doing so. But how do you know if bankruptcy is the right choice for you? This article will shed some light into bankruptcy to help you evaluate if bankruptcy is the best option for your specific situation.
Bankruptcy has some rather serious financial penalties: a bad credit history, increased difficulty in obtaining loans, and higher interest rates are just several of these. So it goes without saying, bankruptcy should never be taken lightly. There are an abundance of debt consolidating companies that are happy to assist you, which is similar to bankruptcy as all your debts are merged into one. This is generally considered a sensible alternative to bankruptcy as the financial penalties aren’t as severe. But the best way to identify if bankruptcy is the best solution for you is to ask for professional advice from bankruptcy experts. In the meantime, however, here are some indications that your financial situation is in a dangerous condition and bankruptcy may be the best option for you.
If you don’t have any money in your bank account and you’re confronting a mountain of debt, then bankruptcy may well be the best option for you. Even if you are capable to work a second job to increase your income, will this allow you to recover from your debts in the next five years? If no, then you really should consider seeking professional advice about your scenario, as bankruptcy can be a desirable alternative. Filing for bankruptcy will relieve you of these debts and while there are financial consequences, it’s probably the best way to recover in this situation.
Making Minimum Repayments Only
If you can only manage to make the minimum repayments on your debts, then the interest on these debts will compound quickly and you should really consider bankruptcy before your condition gets worse. Without any supplementary income, it can sometimes take up to 30 years to repay your debts by making minimum repayments only, so all the interest you’ll be paying over these years can really amount to large sums of money. Whilst you’ll still be paying off debts with interest after declaring bankruptcy, generally you can arrange better terms on conditions on your debts after filing for bankruptcy.
Debt Collectors Are Calling You
When you’re being constantly hassled by debt collectors on the telephone and in the mail, it’s an indicator that your financial scenario is worsening and you need to make some changes. When you’re being contacted by debt collectors, it means that your creditors have sold your debts at heavily discounted rates to debt collectors because they feel that you aren’t in a situation to repay these debts in an acceptable time frame. This is a clear sign that you should honestly consider filing for bankruptcy as it’s quite likely the best solution for both your finances and your mental well-being.
While there are some serious financial repercussions, bankruptcy isn’t the end of the world and in most cases, it’s the first step to financial freedom. When you’re experiencing a mountain of debt and you can’t see any way of recovering in the near future, it’s time to seek professional advice to identify what options you have. While there are many options available to help you in financial hardship, if you’re encountering any of the above warning signs then chances are that bankruptcy is the best alternative to ensure you and your family can secure a prosperous future. Regardless, if you’re facing financial difficulties, it’s best to talk to bankruptcy professionals sooner rather than later. For a confidential discussion about your financial scenario, contact Bankruptcy Experts Hobart on 1300 795 575 or visit www.bankruptcyexpertshobart.com.au