Ways to Avoid Bankruptcy
Bankruptcy is a legal process that those in financial peril must often declare in order to salvage their remaining assets, reestablish their credit, and prevent banks and collection agencies from coming after them. If you are currently in financial distress, there is still hope. Here are several ways to turn your financial misfortune around and avoid filing for bankruptcy.
Limit Your Spending
It’s time to dial back on your frivolous spending and stick to a budget that includes only the necessities. That means you must cut the cable, stop the streaming, and pause your memberships and other subscriptions while you reorganize your finances. Only expenses like gas, utilities, groceries, and your rent or mortgage should be budgeted for each month, and any remaining income should be used to pay down your outstanding debt.
Get a Second Job
It may not be feasible for your schedule, but if you can make it work then consider applying for a part-time or temporary job. A little extra work on nights or weekends will bring in additional income that can mean the difference between stability and bankruptcy.
Sell-Off Your Assets
If you are in a position where bankruptcy is on the table, then you most likely have a problem with overspending and have amassed quite the collection of material items. Whether it’s clothing, electronics, furniture, or toys, sell whatever you don’t absolutely need. From yard sales to websites like Craigslist, Facebook, and Nextdoor, there are numerous avenues that can help you market and sell your items. Afterward, take the extra cash you make and reinvest it towards reducing your debt.
Pay Down Your Debt
Start with your credit card bill with the highest balance and work your way down the line from there. You can quickly reduce the amount of money you are wasting on interest and pay off the principal balance by making payments larger than the monthly minimum. Also, be sure to pay your credit card bills on time. Late payments will destroy your credit score.
Salvage Your Credit Score
If you’re drowning in credit card debt, don’t close your accounts or cut up your cards. Instead, keep your accounts open and assign a different use for each card. For example, one card for gas, one for groceries, etc. By limiting how much you charge to each card, you can easily pay off their balance each month and begin to rebuild your credit score.
Get Protection Before Bankruptcy
If filing for bankruptcy is unavoidable, it’s best to consult with an attorney who is experienced in all aspects of bankruptcy law. At the BCN Law Firm in Clermont, our team can help you put together your application and bring you peace of mind during a stressful time.