From time to time we all get that feeling that perhaps we aren’t managing our money as well as we could be, we often find that the five signs below are the common indicators many of our businesses and individuals face before recognising an insolvent situation. Keeping a close eye on these can help anyone worried about their finances and potentially save them from further and harder insolvency procedures in the future.
You are unsure of how many debts you have.
A common problem for many is that people are unsure of how much they actually owe, if you aren’t sure, you aren’t in control of your debts. Working out what you owe and to who is a great start to any individual on the road to financial stability. If you do not know what you owe it can often be more than you think, look through previous bank statements and make a list of what is owed and to who. If you’re struggling to make repayments or missing some altogether, you will want to get some financial advice or think about making a strict budget every month.
Paying minimum repayments.
Making minimum repayments on debts you owe could mean that they will take years to pay off and will cost you considerably more in the long term. If you are unable to increase payments on money owed you should look at budgeting appropriately and deciding on what you are actually able to pay, increasing your monthly payments will mean you will be far better off in the future. You may also want to think about consolidating loans into smaller monthly amounts.
Late payment of bills and a tendency to go over credit limits.
Late payment of bills or exceeding credit limits will usually mean being stung by further charges driving individuals deeper into debt. Although this is my personal pet hate as it makes no sense to additionally charge people that are struggling financially, this is a common reason why people come to see me long term. It can be a key indicator that individuals need to start looking for insolvency guidance.
Credit cards and cash withdrawals
Try and avoid using a credit card at cash machines as you will be hit by a surprisingly high withdrawal charge by your provider and interest is charged the moment it appears. If you need to use your credit card use it only for store/online purchases as the percentage will most likely be far lower than getting cash from the wall. Remember to avoid extra charges by paying off the balance every month.
Debt for more debt.
The biggest indicator of them all and when the red warning light should start to flash! The amount of people that give me a call after a few months of using payday loans or additional credit card charges to pay for their personal loan etc. is unbelievable. One of my biggest tips is that if you are struggling to pay a loan for a month and it is a short term issue go and talk to your bank manager or provider. They are likely to be understanding to your situation and work out a better deal for yourself than any payday loan provider ever could.
Although a simple guide if you are struggling with more than one of the points (especially number 5!) then get in touch for confidential unbiased advice. Unbeknown to many people is that are a range of insolvency options available to people struggling with debts, the majority of our enquiries end with individuals just needing a tighter budget or getting in contact with those they owe money and working out an informal plan.