In this article, you will learn how to avoid bankruptcy. A lot of persons are into serious debts which they are even confused about how to pay off. Bankruptcy is not and should not be your final bus stop.
This is because bankruptcy affects your credit negatively. Also, the effect takes time to heal. Why not find other options before filing Chapter 7 or Chapter 13 bankruptcy. What can you do?
How to Avoid Bankruptcy; Make Consistent Payments
Write a budget, set some money aside for debt payment. Pay a percentage of your debt on a monthly basis. You can cut down on your spending. Reduce your cable subscription, avoid some vacations and so on. Add the money up and pay off higher balances. To raise more money, you can take up additional work or work overtime. With these options, you can avoid bankruptcy.
How to Avoid Bankruptcy; Seek Help From Your Creditors
Inform your creditors about your financial situation. Some credit card companies have hardship programs. Contact them if you are willing to pay, they may lower your interest rates and your monthly payments. Before you enter a hardship program make sure your monthly payment and interest rate actually go down. Otherwise, you could be stuck with an even higher minimum payment.
Sell Some Assets
There may be some assets you really do not need. Why keep them when you have debts to settle? Sell whatever you can spare and use the money to pay off your debts. Do not wait to pay late when you know you can sell something to pay it off. It could be you have two cars, too many electronics or jewelry. You can sell your furniture, jewelry, and electronics on eBay, Craigslist, even in your front yard. Moreover, your friends can help you buy them.
Settle With Creditors and Debt Collectors
Completely avoid hiring a debt settlement company. You will lose more money and your debt will still linger. You just have to consistently make the minimum payments on all your debt and concentrate on debts charged-off or sent to collection. This will save you from bankruptcy.
Go For Consumer Credit Counseling
Seek professional help to settle your debt issues quickly. Consumer credit counselors give you wise and useful tips to pay your debts very fast. They usually work with creditors to get your payment and interest rate reduced. Moreover, they will aid you to build a debt management plan to pay off your debt within a particular time frame.
Inform Your Family and Friends
Calculate all your debts and decide on how to pay them off. Do not tell them unless you already have a plan to pay them back. This is to ensure that there is not a broken relationship. Tell your relatives about your debt situation. They may be willing to lend you money or even give you some without you paying them back.