5 tips on how to avoid bankruptcy
Addictive, habitual and recurrent debt practices, if not kept on check, will surely lead you to file for bankruptcy. Filing for bankruptcy should be the last thing on your mind. It is advisable to try out all means to avert bankruptcy, which can include these discussed below:
1. Friends and Family can be Helpful
Friends and family will always stand by you if the entire world turns against you. This can be that moment to look up to the family for help again. Though many believe that borrowing money from family members can be a terrible idea-and it is actually true, you should give it a shot if you already have a well thought out plan on how to make repayments. It is a good idea to borrow just enough to cover for the bankruptcy, lest you trigger some unending family conflicts should you fail to repay. Immediately you make a rebound, it should be your first priority to untie yourself from the awkward family situation!
2. Talk to Creditors
Creditors are human beings. Some of them have been in a situation same as the one you are going through, even worse. Do not be afraid to make a disclosure regarding your woes and the possibility of failure to meet your financial obligations. The sooner you will let them know of your financial hardships, the more willing they can be to help you out. If you have all along been a trusted customer to them, they will be more than willing to understand your situation and make arrangements for you to avoid going bankrupt. This can happen in two ways.
- Your monthly repayment amount may be adjusted, probably decreased to a level you will be more comfortable and can easily meet.
- Significant cut on the interest rate.
- Both of the above can be executed if your situation is critical.
Remember that most financial institutions and creditors have full knowledge on the possibility of occurrence of such situation. As such, most of them are well prepared and equipped to handle them should they occur. They know that you are a valuable customer, and should things get going again for you, they will have much more to benefit.
3. Liquidate some of your assets
Are you afraid of living without your assets because of the threat of bankruptcy? You shouldn't be because bankruptcy itself will be much worse. It is good to take the precaution early by disposing off all your assets and covering up all the debts. If you wait until much later, it may be too late then and things will have spun out of control. Don't worry losing part of your assets as you can replenish them as soon as your finances pick up. Remember that you are in a temporary situation which you can get out of easily if you make a tactical and well-calculated move. What is important for you now is to survive the impact.
What exactly can you sell off to cover the debt? Virtually everything—your furniture, electronic gadgets, precious stones…you name it. It’s true that some of them will have sentimental value and they may be hard to part with, but the persistence of the current situation will force you, anyway. Spare your credit ratings now, rather than regret later!
4. Seek Counseling
Now, many people are afraid to seek credit counselors’ advice. Most of them see such a move as an expression of weakness, desperation and lack of ideas. What they fail to realize is that it might the only chance to get things kicking again. Bear in mind that you are seeking help from professionals who can be able to provide a leeway for the looming crisis. Besides, if the situation deteriorates, it will be mandatory for you to consult one before eventually doing the ultimate thing - filing for bankruptcy.
5. Make Debt Settlement
Debt settlement is a twin to bankruptcy, though a little bit better. You should opt for debt settlement if, and only if all the above has failed to yield fruits. Still, you should do it right. Avoid debt settlement companies like a plague-- they are mostly after siphoning more your resources. Instead, make lump sum payments to your creditors as soon as you strike a deal. Follow instructions, terms and conditions to the later for it to be successful.
My name is Craig R. Chlarson. Whether you are seeking to eliminate your debt, typically through a chapter 7 filing, or whether you are seeking to reorganize your debt, typically through a chapter 13 filing, or even if you have basic bankruptcy questions, call me today. I can help you.
To schedule an appointment, call (435) 901-3449
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