Is Bankruptcy My Best Option? How To Know If Bankruptcy Is Right For You

Going through financial hardship is a particularly stressful situation and unfortunately, millions of people throughout the world find themselves in this position every day. People in this scenario have various options to recover from their financial problems, and bankruptcy should be regarded as a last resort when all other options have been exhausted. You’ve probably seen several of those debt consolidating businesses advertise their services on TV for example. In most cases, it can be complicated to try to figure out the best way to recover from financial challenges, and many will resort to bankruptcy simply because it seems to be the simplest way of doing so. But how do you know if bankruptcy is the right option for you? This article will shed some light into bankruptcy to help you figure out if bankruptcy is the best option for your personal situation.

 

Bankruptcy has some fairly severe financial consequences: a bad credit rating, increased difficulty in securing loans, and higher interest rates are just a number of these. So needless to say, bankruptcy should never be taken lightly. There are lots of debt consolidating businesses that are happy to help, which is similar to bankruptcy as all your debts are combined into one. This is typically considered a sensible alternative to bankruptcy as the financial penalties aren’t as severe. But the best way to figure out if bankruptcy is the best solution 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 serious condition and bankruptcy may be the best option for you.

 

No Savings

 

If you don’t have any savings in your bank and you’re confronting a mountain of debt, then bankruptcy may well be the best option for you. Even if you’re able to work a second job to increase your income, will this allow you to recover from your debts in the next 5 years? If no, then you should think about seeking professional advice about your scenario, as bankruptcy can be a viable alternative. Declaring bankruptcy will relieve you of these debts and even though there are financial consequences, it’s probably the best way to recover in this situation.

 

Making Minimum Repayments Only

 

If you can only afford 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 decays further. With no supplementary income, it can sometimes take up to 30 years to pay off your debts by making minimum repayments only, so all the interest you’ll be paying over these years can truly amount to significant sums of money. While you’ll still be repaying debts with interest after filing for bankruptcy, typically you can arrange better terms on conditions on your debts after filing for bankruptcy.

 

Debt Collectors Are Calling You

 

When you’re being frequently hassled by debt collectors on the phone and in the mail, it’s a sign that your financial position is worsening and you will 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 prices to debt collectors because they strongly believe that you aren’t in a situation to repay these debts in an acceptable period of time. This is a clear indication that you should seriously think about declaring bankruptcy as it’s probably the best solution for both your finances and your emotional well-being.

 

While there are some serious financial implications, bankruptcy isn’t the end of the world and in many cases, it’s the first step to financial freedom. When you’re dealing with 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 find out what options you have. While there are many alternatives available to help you in financial hardship, if you’re experiencing any of these warning signs then chances are that bankruptcy is the best alternative to ensure you and your family can secure a bright future. In any case, if you’re facing financial difficulties, it’s best to get in touch with bankruptcy professionals sooner rather than later. For a confidential discussion about your financial circumstances, contact Bankruptcy Australia on 1300 795 575 or visit www.bankruptcy-australia.net.au