Looming Bankruptcy: Here’s What You Can Do
Most people are currently struggling with bankruptcy, or they are on the verge of bankruptcy due to the current economy.
Some have even resorted to filing for bankruptcy as a means to manage their debt margins. Everyone struggles to create wealth, and we do everything in our power to avoid bankruptcy since it tends to hinder our financial goals. However, it’s sad to note that despite proper financial planning, people and companies still go bankrupt. Some of the root causes of bankruptcy are intentional, such as the misappropriation of funds; while in other cases, the root cause can be out of your control.
Here are measures that you can take to prevent bankruptcy and ensure that you remain afloat during these trying times.
1. Limit your Expenditure
First, take note of how much you spend and write down a budget that will help control your impulsive spending habits. Limit your credit card use and instead, go the old fashion way and pay for everything using cash. Besides, try and remodel your lifestyle by downsizing on some aspects that suck up all your money.
Reduce the number of times you go on vacations, drive an old model vehicle and move to a smaller house to reduce your spending habits. There are luxuries which you consider necessities which you should limit. Some of the luxuries include taking cigarettes, alcohol, cable television, visiting the spa, magazine subscriptions and gym memberships.
2. Get Professional Advice
Some people risk being bankrupt as a result of poor spending habits and their inability to manage their income. Sometimes, financial problems might require legal representation and legal experts at www.nylegalhelp.com would advise anyone anticipating bankruptcy to consult a debt relief law firm that’s dedicated to providing real solutions to your money headache. A professional advisor will help you salvage the situation by making some minor adjustments to your lifestyle.
3. Find a Second Job
If you are struggling to make ends meet, then you should consider getting a second source of income. You can use the extra income for paying off debts. However, with this strategy, you will have to sacrifice a lot since you will limit the time that you spend with your friends and family. It’s only a temporary measure, and once you are done balancing your books, you can return to your old lifestyle.
4. Seek Help from Friends and Family
Borrowing money from friends and family often results in broken relationships; however, given that bankruptcy stares at you in the face, you are left with no option. Calculate the amount of money you need to evade bankruptcy and request friends or family members to contribute and help resolve the issue. Formulate a repayment strategy to ensure that you don’t cross paths with friends and family members, and ensure that you honour your word.
5. Sell Some Assets
When life hits you hard, and you have no other alternative, you should sell one of your assets and use the money to clear some debts. Once you notice that bankruptcy looms, handle the problem in advance to avoid issues that may arise as a result of defaulting payment. If you have electronics, jewellery or furniture, sell them at a reasonable price and pay off debts. Selling some of the assets is only a temporary move; it shouldn’t inconvenience since you will get over it with time.
6. Take a Debt Consolidation Loan
Such a loan is a combination of all bank loans and credit card loans into one loan. Look for a credit facility that provides debt consolidation and inquire whether you qualify for such an arrangement. The loan has a lower interest rate; hence, you can use it to cover all other debts and remain afloat. The strategy only helps you manage the problem, but it doesn’t solve the problem.
7. Clear Debts with Debt Collectors and Creditors
Debt consolidation loans have their limitations since banks will force you to pay interest while you are struggling to pay off debt. Debt settlement companies generally, end up taking too much of your time and money; therefore, avoid them if you can. To resolve the looming bankruptcy situation, talk to your debt collector or your credit card facility provider and agree on terms of payment. Make an effort to settle the current debts while also focusing on debts that have been sent to collection.
Anyone can become bankrupt, but all it takes is some initiative to avoid the situation. The above methods can help you avoid bankruptcy or even help in debt settlement. Take note of factors that lead to bankruptcy then make some significant lifestyle adjustments. The means to evade bankruptcy might take a while to implement fully, but with the right dedication and financial management, you will balance your accounts.