Many people face financial constraints, and it is how they handle the problem that offers the solution. In extreme cases, you might want to look for a more targeted solution to the problem. Filing for bankruptcy is among the many ways. You should, however, view bankruptcy as the last-ditch in your plan. In cases where the circumstances are outside your control, you might consider bankruptcy. But can you avoid bankruptcy? Yes. Here are a few tips to help you.
Reduce Your Spending
Once you start getting low on cash, you might want to reduce your expenditure level. This is vital, as you need to finance your debt and reduce the pressure on yourself and the people depending on you. While it might be a hard decision, cutting cable, skipping recreational activities and dinners, and using the bus can help you reduce expenditure. It is crucial to talk to your family about the current situation and prepare them for the future. You should note that most couples and individuals who consider bankruptcy choose between chapter 7 and chapter 13. However, bankruptcy is something you have more control over than you think. You should review personal and family budgets to reduce expenditure and cut off debts over time.
Increase Your Income
Creating sources that can help you get extra money makes it easier to finance your credit. While you have a regular job, consider picking up extra hours in other part-time jobs to facilitate your income. You should also consider starting a side job to engage with your family to bring in extra cash. Once you find another source of income, you will reduce the debt repayment pressure and find it easier to concentrate on other productive activities. You can also sell spare items in your home, such as jewelry and furniture, to raise the money needed to pay down your debt. You should not wait until you are late for payment to decide.
Seek Consumer Credit Counseling
What you know about debt and bankruptcy can help you make proper decisions. Getting professional help can also help you avoid overwhelming and stressful situations. The availability of consumer credit counseling services in the market offers a platform you can utilize. When you understand what filing for bankruptcy entails, avoiding such situations becomes easier.
Seek Financial Assistance From Family and Friends
You need the courage to admit your debt situation and seek financial assistance from your family and friends. As much as it might be the last step you want to take, it can also be the solution to your problems. Filing for bankruptcy can affect your family and loved ones negatively. You need to avoid the embarrassing situation when the creditors come after your family property.
Seek help from the people who care about your welfare. The chances that you might get help and reduce the pressure on your debt repayment are much higher with your family and friends involved. You also get a platform to learn about the best tips for dealing with bankruptcy from family members or friends who have previously handled such situations.
Sell Your Property
Before bankruptcy becomes an option, you should consider selling some of your belongings and property. This is to avoid total liquidation of your property by the creditors to facilitate your debt repayment. It is crucial to consider when you can afford to part with it before the situation worsens. If selling your property is an option, you should work with an appraiser to determine the value of your property. After the appraisal, you can prevent mold growth and other elements that might lower the property value. Note that after 48 hours of water damage, you create the best environment for mold colonies to grow, hence the need for effective preventive measures. Remember, the goal is to avoid bankruptcy.
You can also sell other property you own that will provide you with a big chunk of cash, like a boat. While the recreational boating industry supports 650,000 indirect and direct American jobs, you’re not getting anything from simply owning a boat. Sell it so you can use the money for necessities.
The strategies you use to gain control of your debt and pay it on time determine how easy it will be to avoid bankruptcy. Note that having bankruptcy listed on your credit report can negatively impact your future financial plan. If you make more money, spend less, work with financial counselors and make sacrifices, you can avoid bankruptcy.
