Without a doubt, the best way to save you from a self-ruining situation such as bankruptcy is by actually not putting your finances in such a state.
Bankruptcy is a humiliating experience. It is also a very primitive and grossly unfair means of dealing with a debt situation and it can be a no-win situation for all involved.
Bankruptcy would not be just an emotional and mental burden. The loss of property and the 10-years blot on the person’s credit report will be enough grounds in order to realize the gravity of the situation. The consequence of not paying debts will continue to exist long after filing. Even if a person would get some sort of credit later on, the interest will be 30% to 50% higher than the usual charge. Some companies would require a deposit of at least 6 months before turning on its services.
The recent years has seen changes made by the government towards stiffer bankruptcy laws. Congress has worked on legislation making it tougher or impossible for some people to file. Pending passage and the president’s signature, the bill would make this financial “new beginning” less of an option to the people.
For those people having a large amount of debt but an insufficient income on hand, bankruptcy would become their last resort. On the other hand, in many other cases, there are several ways to emerge from the pits of financial ruin without having to consider getting a bankruptcy case filed. Shown here are some tips to get you out of the situation long before you immerse yourself in it.
5 Helpful Tip To Avoid Bankruptcy
1. The first thing to do is to categorize your debt into two, secured and unsecured debts. Unsecured debts are those for which there is no collateral, example are credit cards, some car loans, personal loans, and judgments. On the other hand, secured debts are those protected by collateral, this includes second mortgages and loans secured with a car or other property.
2. Contact the company or creditors in particular who hold your unsecured debts. Work out things with them, they will sure to also work out things with you, because they would rather not have you file bankruptcy.
3. You can also turn to your assets. You can perhaps borrow from a pension fund to pay off your debts. Many plans can let you get your hands on loans that have low interest rates.
4. Be serious about getting money on hand. This would imply selling valuables like an extra car, television sets, a refrigerator, or a home entertainment center. Anything that is too much for you, an excess to your living in particular.
5. In addition, you can take a second job. In this way, you can gain extra if not enough money to pay your debt without resorting to selling your properties.
As with most things, the easiest way to get out of money trouble is not to get into it. Self-control is the key. Start with a realistic financial plan and stick to it. Keep away from impulse buying. Do not buy something on the spur of the moment attraction. The key is to sleep on it; then you will realize that you can do without it. Try not to dwell too much on future income, since sometimes it may never come true.
The song holds true “the best things in life are free”. Do not be over extravagant. Dwell your happiness on things that are lasting but free, like emotional satisfaction in particular.
Dean Shainin offers online Bankruptcy and debt advice. For more information, articles, news, tools and valuable resources on bankruptcy and debt solutions, visit his site at: How To Avoid Bankruptcy