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

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Going through financial hardship is a particularly stressful situation and sadly, millions of individuals around the world find themselves in this situation every year. People in this situation have many options to recover from their financial woes, and bankruptcy should be regarded as a last resort when all other options have been exhausted. You’ve quite possibly seen several of those debt consolidating companies offer their services on TV for example. In many cases, it can be complicated to try to find out an effective way to recover from financial troubles, and many will resort to bankruptcy simply because it seems the simplest 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 decide if bankruptcy is the best option for your specific situation.

Bankruptcy has some pretty severe financial penalties: a bad credit report, increased difficulty in obtaining loans, and higher interest rates are just several of these. So it goes without saying, bankruptcy should not be taken lightly. There are many debt consolidating companies that are happy to assist you, which is similar to bankruptcy as all your debts are combined into one. This is generally considered a viable alternative to bankruptcy as the financial penalties aren’t as serious. But the best way to find out if bankruptcy is the best alternative for you is to ask for specialist advice from bankruptcy experts. In the meantime, however, here are some signs that your financial position is in an acute 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 have the opportunity 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 consider seeking professional advice about your condition, as bankruptcy can be an attractive alternative. Filing for bankruptcy will relieve you of these debts and although 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 situation gets worse. Without any additional 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 enormous sums of money. Though you’ll still be repaying debts with interest after filing for bankruptcy, regularly you can arrange better terms on conditions on your debts after filing for bankruptcy.

Debt Collectors Are Calling You

When you’re being regularly hassled by debt collectors on the phone and in the mail, it’s an indicator that your financial condition is deteriorating and you have 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 believe that you aren’t in a position to settle these debts in a reasonable time frame. This is a clear indicator that you should honestly think about declaring bankruptcy as it’s likely the best solution for both your finances and your psychological well-being.

Whilst there are some serious 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 encountering 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 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 encountering financial difficulties, it’s best to consult with bankruptcy professionals sooner rather than later. For a confidential discussion about your financial circumstances, contact Bankruptcy Experts Sydney on 1300 795 575 or visit