Introduction to Filing Bankruptcy
Debts can give you numerous sleepless nights. However, bankruptcy should be the last alternative when trying to get solutions to your financial constraints. On the other hand avoiding bankruptcy has become an uphill task for many. As a result people end up losing their property at alarming rates. Filing bankruptcy can actually have a tremendous effect on your life. As such explore other alternatives before you consider filing for bankruptcy. Below are tips to help you clear your debts, and improve your credit score without having to file for bankruptcy.
5 Tips to help you avoid filing bankruptcy
1. Cut on your spending
Learn to handle your budget, so as to get rid of unnecessary expenses. Honestly there are things you can do without. Try to analyze how much you spend on a monthly basis. This is a sacrifice worth making, just transform your lifestyle and adopt a more affordable one.
Effective ways of reducing your budget:
- Relocate to a smaller house -This is not the time to have absolute comfort. You are probably living in a big house in which you pay huge rent. On the other hand the house could be yours and you do not pay for it. Still you can move to a smaller house and rent out your big house. This way you will be able to save some money and avoid bankruptcy.
- Adjust your lifestyle – You can start by reducing the number of channels you subscribe to on cable television, and pay only for the ones you need. Besides that you can also consider skipping those expensive vacations you go to frequently. If you have an expensive car, you can sell it and get a cheaper one with little maintenance costs attached to it. In addition try to restrict your spending to basic things such as clothing, food and transport. Do away with regular visits to the spa, high speed internet connection, and even gym subscriptions. This way you will have so much money at your disposal to help you settle some of your debts.
2. Consider selling some of your unwanted property
We usually have many things we do not use in our homes. They just lie there consuming space for no good reason. Instead of declaring bankruptcy, sell some of these things. Selling some of your jewelry, electronics, and any other thing you have in excess. I consider this better than declaring bankruptcy and losing almost all your assets.
3. Find additional sources of income such as taking another job
You can be able to work as much as can so as to make extra money. If you have a stable daytime job then find a . You can therefore work at night and even weekends when you are not in your permanent place of employment. In addition you can decide to invest in a small business to help you generate more income.
4. Talk to your creditors
However hard you work, you may not be able to settle all your debt at once. Your creditors may not be that bad but if you do not communicate your situation to them, they will not know. Request them to allow you pay in small installments. If this happens you will manage to pay your debts while at the same time managing your daily expenses.
5. Get professional assistance and involve family and friends
You may not know how to go about your situation. Do not rush into declaring bankruptcy, get a professional credit counselor. This expert will advise you on what to do. Besides talk to close family and friends, they can be of help. Do your part and request them to help fill in the blank space. As they offer their help do not relax, work on ways of repaying them later.
The most important thing to learn when it comes to bankruptcy, is how to handle your finances. Treat money with dignity and be sure to account for almost every cent. Always try to strike a balance between what you need and want.