Experiencing financial hardship is a pretty stressful situation and sadly, millions of individuals around the world end up in this situation each year. Individuals in this situation have quite a few options to recover from their financial burdens, and bankruptcy should be regarded as a last resort when all other alternatives have been exhausted. You’ve most likely seen several of those debt consolidating companies promote their services on TV for example. In a lot of cases, it can be overwhelming to try to figure out ways to recover from financial troubles, and many will resort to bankruptcy simply because it appears to be 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 personal situation.

 

Bankruptcy has some pretty severe financial penalties: a bad credit report, increased difficulty in securing loans, and higher interest rates are just several of these. So needless to say, bankruptcy should not be taken lightly. There are numerous debt consolidating businesses that are happy to assist you, which is similar to bankruptcy as all your debts are consolidated into one. This is normally considered a viable alternative to bankruptcy as the financial penalties aren’t as serious. But the best way to identify if bankruptcy is the best option for you is to ask for reliable advice from bankruptcy experts. In the meantime, however, here are some signs that your financial situation is in a critical condition and bankruptcy may be the best alternative for you.

 

No Savings

 

If you don’t have any money in your bank account and you’re grappling with a mountain of debt, then bankruptcy may well be the best solution for you. Even if you have the capacity to work a second job to increase your earnings, will this enable you to recover from your debts in the next 5 years? If no, then you really should think of seeking professional advice about your condition, as bankruptcy can be an attractive alternative. Declaring bankruptcy will relieve you of these debts and whilst there are financial repercussions, 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 intensify aggressively and you should really consider bankruptcy before your financial situation decays further. Without any extra income, it can often 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 huge sums of money. While you’ll still be repaying debts with interest after declaring bankruptcy, generally you can negotiate better terms on conditions on your debts after declaring bankruptcy.

 

Debt Collectors Are Calling You

 

When you’re being consistently hassled by debt collectors on the phone and in the mail, it’s a sign that your financial position is deteriorating 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 highly discounted rates to debt collectors because they are convinced that you aren’t in a position to settle these debts in an acceptable time frame. This is a clear sign that you should seriously consider filing for bankruptcy as it’s probably the best option for both your finances and your psychological well-being.

 

Whilst there are some severe financial consequences, bankruptcy isn’t the end of the world and in many 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 discover what options you have. While there are many options available to help you in financial hardship, if you’re familiar with any of these warning signs then chances are that bankruptcy is the best alternative to ensure you and your family can secure a prosperous future. In any case, if you’re facing financial difficulties, it’s best to contact bankruptcy professionals sooner rather than later. For a confidential discussion about your financial situation, contact Bankruptcy Experts Hervey Bay on 1300 795 575 or visit www.bankruptcyexpertsherveybay.com.au