Five signs you may be headed for personal insolvency
Personal insolvency doesn't usually happen overnight or in the blink of an eye. Instead, it is generally just another step in a long line of financial difficulties and hardships. With this in mind, there are signs you can look out for that may indicate you are heading for insolvency – the earlier you notice these signs, the better your chance to avoid the situation altogether.
You're struggling to pay your bills on time
We all know how important it is to pay our bills on time. The problem is, with so many bills and so little time, this can quickly get away from us. If you find yourself in arrears on a regular basis, receiving demands rather than polite notices, this could lead to more severe difficulties in the future.
You don't have enough cash flow to make regular purchases
There are many different types of wealth. You may have money tied up in assets and investments, but you still need regular cash flow to keep you going each week. If you find that your available funds don't stretch to cover the weekly grocery shop or other vital purchases, this may be a sign of difficulties to come.
Your cost of living has just dramatically increased
Cost of living increases can happen for many reasons. If you have an accident in your car and need to pay for expensive repairs, if you have a new baby in your household and are feeling the strain, or if you simply find that the cost of goods and services is growing too quickly – in all of these situations it can be difficult to make ends meet. Even if your costs remain the same, suddenly losing an income stream can make budgeting a real challenge. If you suddenly find your income no longer supports your outgoings, this may be a sign of personal insolvency to come.
You're running out of borrowing options
Getting rejected for credit is never a good feeling, but it can also be a significant red flag. If you feel that you need to borrow more money to pay back creditors, you could be on a dangerous spiral, the outcome of which is simply to owe more money to more creditors. Once these borrowing avenues start drying up, you could be heading for personal insolvency.
Your savings are going down rather than up
Savings are there to protect you for the future, and to give you peace of mind that you have enough money to support you in any eventuality. However, if you have to start depleting your savings, taking money out of savings accounts to make payments that should be handled by your monthly income, this can be a serious problem. By continuing to struggle in this way, you could leave yourself without a savings safety net in the future.
Gain the support you need from Clare Corrigan
Don’t let personal insolvency ruin your life. Here at Clare Corrigan, we know just how difficult it can be to find yourself insolvent, or to feel your finances heading in this direction. Reach out to our team today, and let’s chat about your options.
