Ways to Prevent Bankruptcy
If you’re struggling with your finances, you’re not alone. Last year, 779,828 households filed for bankruptcy in the United States. Many of these people found themselves in financial trouble due to circumstances that weren’t entirely their fault.
Unfortunately, couples often find themselves in dire financial straits after filing for divorce. Others suffer losses from failed business ventures or have their savings wiped out by unexpected medical bills. Whatever the reason for your financial woes, you’ll be happy to know that bankruptcy isn’t the only solution.
Before you give up, check out these five tips for preventing bankruptcy and getting your financial life back on track.
Table of Contents
1. Set (and Stick to!) a Super-Strict Budget
Keeping track of where your money goes is really the only way to dig yourself out of debt. To do this, you’ll need to set a super-strict budget and write down exactly what you spend every day.
Make sure you have enough money to pay your rent or mortgage and necessary expenses like electricity and food. Beyond that, plan to put every penny you can towards paying off your outstanding credit card and loan balances.
2. Sell as Much as You Can
We often don’t realize how much stuff we have until we take an honest look around. If you truly want to get out of debt, make it your priority to sell everything you can. Start with higher-value items like electronics, handbags, and furniture you don’t necessarily need.
Depending on how serious the situation is, you might need to make big moves like selling jewelry, your car, or even downsizing your home.
3. Increase Your Income
Cutting expenses is only half the equation. Finding ways to earn more money will also help you get your finances back on track.
Take an honest look at your current job and decide whether it’s feasible to ask for a raise. If not, consider looking for a job that will pay you better or resign yourself to picking up a second job or side gig.
4. Seek Help from a Bankruptcy Professional
If you can’t see the light at the end of the tunnel, seek the advice of a financial advisor who specializes in bankruptcy prevention. He or she will help you determine whether you have the potential to dig your way out.
If things don’t look good for you, remember that filing for bankruptcy without a lawyer is a dangerous move. Spend the money to work with a professional so you don’t end up making things worse.
5. Rebuild Your Credit
Digging yourself out of a potential bankruptcy is no easy task, but it can be done. If you’re starting to get back on track but notice that your credit has suffered, you’ll want to work on building it back up.
Companies like CardGuru can help you find the best credit card offers for poor credit. Use your new card at least once a month and pay it off right away. This will help you re-establish yourself as a responsible borrower.
Talk to a Bankruptcy Lawyer Before It’s Too Late!
When your finances start to spiral, being proactive can make a huge difference. Before things get too bad, search for a bankruptcy lawyer near you and schedule a consultation. This is a case where it’s well worth the time and effort to fully analyze your situation before making any major decisions.