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6 Tips to Help Prevent Bankruptcy

“Bankruptcy is a serious decision that people have to make.”

Let’s face reality; no one wants to file for personal bankruptcy. However, most of the time in difficult circumstances, bankruptcy is the only top solution for dealing with out-of-control debts. In this article, we will discuss some great and helpful tips for those who are dead set on avoiding bankruptcy and trying to get out of debt. No doubt, once you start living on credit and spend more than a limit, the debt starts multiplying until it seems like there are no other option than bankruptcy. However, if you are dealing with financial problems and want to avoid bankruptcy, then here are 6 useful tips that can help you to avoid bankruptcy.

  1. Pay off your debt: Yes, it’s the first thing you can do. Make a list of your debts (if your debt is somehow under control), including creditor info like monthly payments, the total amount of debt and due date. You can also use a credit report to confirm your debts. When debts are in one place, then you can see a bigger picture and can re-adjust your budget. It may not be a mutually exclusive option, but it might help you to control your debts.

  2. Sell some of your assets: Considering this option? You may have stuff at home that is no longer useful. Why not sell these items to get some extra cash to eliminate and pay off your debt a tad sooner? It can help you relieve pressure from creditors who are continuously chasing you for payment. You can use that cash to pay off those creditors who charge a higher interest rate.

  3. Contact creditors to write off debt: During rainy days, people struggle to keep their heads above water financially. What about contacting your creditors and talking to them? Check your credit score and contact creditors to cut your payment and make necessary arrangements that work for both parties. Just call your creditors and explain to them you’re struggling to pay your bills.

  4. Be content with what you have: “If you are not content with your life today than there is nothing that you could buy to change that.” This is the motto that you should live by if you’re dealing with financial stress. You should consider paying off your debts and avoid spending more than you have. Take time to think about what you buy, and if it is actually worth it or even if it is needed. Credit cards have made our lives easier by making us think that it’s a form of cash that we currently possess. Don’t buy what you don’t need and avoid temptation.

  5. Ask your family and friends for help: It might be a little embarrassing, but not a bad option. You should openly talk with your close family and/or friends about your financial struggle. You can get moral support from them, which can help you in the long run.

  6. Set a balanced budget and stick to it: Last but not least, just go ahead and set yourself a balanced budget and do your best stick to it. Estimate your income, your expenses, and how much you save for paying off your debt. This way you can control the rampant spiral of debts.

“Beware of little expenses; a small leak can sink a great ship.”

Bankruptcy can be a daunting task for anyone. We shared with you a few tips to avoid putting yourself in financial jeopardy. By no means are we telling you these are the best tips, but we want to help you alleviate some of your debts and avoid bankruptcy as a whole. If you feel like your debts have piled up and you can’t avoid personal bankruptcy, schedule an appointment with us or give us a call to discuss how we can help you through this process.

The information contained in the Karmel Davis & Associate website is for informational purposes only and should not be considered legal advice on any subject matter. Furthermore, the information contained on our website may not reflect the most current legal developments. You should not act upon this information without consulting legal counsel.

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