When debts become overwhelming and desperation spikes, filing for bankruptcy may seem like the only solution. Though it can rid you of those debts, filing for bankruptcy can have devastating effects on your credit score and prevent you from future opportunities. A quick fix is not worth a lifetime of struggling, so you should take preventative measures to keep from reaching that point. The following are some tips that can help you avoid bankruptcy:
Sending freely and not budgeting can be detrimental to your financial situation. Try creating a list of any expenses and bills you have, then determine a maximum amount you can spend on each. A budget for each week and/or month that allocates where your money is going will help you to not only keep track of your spending, but will also make you more conscious about how much you spend.
Budgeting will cause you to pay closer attention to what money is being spent and where. This will likely bring awareness to expenses you may not need and probably can’t afford. For example, cable services and monthly subscriptions are nice and lavish, but when facing financial difficulties, they can drag you down more than you realize. Cut these out, and instead put that money towards important bills or savings.
A frugal lifestyle is necessary if you are facing the possibility of bankruptcy. Make conscious efforts to spend money only on the essentials. After the necessities are accounted for, it is wise to put the remainder of your paycheck into savings. Even just putting 10% of each check into savings can be beneficial, because it will add up and act as a safety net in case something were to happen.
If you are on the verge of bankruptcy, then it is likely that debt is currently the bane of your problems. Properly handling your debts is crucial to how your situation will pan out. Negotiating these debts is the first step. Talk with your creditors and lenders and see if they are willing to lower your interest, negotiate a repayment plan or even reduce the amount owed. Creditors and lenders are usually willing to negotiate debts if it will increase their chances of getting pain, once bankruptcy is filed they won’t receive any money.
Protect yourself and your financial future. Filing for bankruptcy is not always the best solution, so take alternative measures to fix the problem before it’s too late. If you are still considering filing for bankruptcy, you should contact an experienced lawyer such as the estate planning attorney Scottsdale AZ locals trust who can help you explore your options. He or she can provide you with the legal guidance needed to decide the best course of action for your situation.
A special thanks to our authors at Hildebrand Law for their insight into Estate Law.