5 Tips to Avoid Bankruptcy Over Debts

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Bankruptcy is an opportunity for a citizen in a difficult situation to get rid of debt. Admitting financial disability allows you to start a new, more responsible life. However, not everyone wants to resort to it since bankruptcy status provides not only opportunities but also has certain consequences for your credit score (for up to 10 years). It is not for everyone, so you need to know how to avoid it.

1. Contact Specialists

It is often difficult to get out of a complex life situation on your own. In this case, do not be afraid to ask Debt Stop experts to help ease your financial burden. Experienced specialists will conduct a thorough assessment of your securities and recommend the best strategy. Debt settlement, consolidation, and management are alternatives to bankruptcy.

2. Reduce Your Expenses

You should create a budget that includes the costs of your needs and wishes. It will help you identify the kinds of expenses that you can give up without harming the quality of your life. These usually include:

  • Dining out;
  • Purchasing of jewelry;
  • Using magazine subscriptions;
  • Buying alcohol, cigarettes, and sweets;
  • Getting expensive clothing, etc.

Choose favor of cheaper analogs of the products and services you use. For example, instead of a taxi, you can go to work using public transport and take out coffee not in a cafe, but from home in a travel coffee mug.

3. Increase Your Income

Additional work at your central place of employment, of course, will take up your time, but at the same time, it will bring extra income. You can find a part-time job or monetize a hobby that you usually do in your spare time. Connect your partner or spouse to it so that your family can get out of debt quicker. Check out the requirements for government assistance; you may be eligible. If you live in a multi-room apartment or house, consider renting out one of the premises.

4. Sell Stuff You Don’t Use

If there are items that you don’t use, they should be sold. Find another owner for your old smartphone, cabinet, dishes, jacket, old jewelry, and so on. Many people do not even imagine how many goods are idle, and you can make money on them. While it will be a one-time income, it may slightly improve your financial situation. In conditions when you are facing bankruptcy, all such means are good.

5. Talk to Lenders

The biggest mistake debtors make is running away from creditors and avoiding direct dialogue with them. Experts recommend letting them know about your current condition and your inability to pay bills on time. Such proactive measures can play into your hands. Lenders can accommodate you and revise your payment plan or arrange a debt settlement.

Know Your Options

While bankruptcy may get you out of debt, it is not always the best solution. If you find yourself in a difficult financial situation, do not despair and consider all the options available. In some cases, you will be able to cope on your own (even negotiate with creditors); in others, you may need the help of specialists.