Life has ups and downs, and every one of us faces various challenges. So, don’t think you’re the only one who is going through financial turmoil. People file bankruptcy every single day, and you’re no exception. There comes a time when bankruptcy becomes the only viable solution.
Debt accumulation can be due to recession, unable to service your loan, high inflation rates, and federal regulation. And remember bankruptcy can be the beginning of something good. So, don’t despair. In this write-up, we have gathered vital information that will help you avoid filing for bankruptcy.
- Have a Negotiation with Creditors
You will get surprised to know that lenders are always willing to negotiate with clients when they default loans. If you’re facing some financial hiccups that hinder you from paying your mortgage, you can engage your creditors. After all, they are humans, and they will understand. You can ask for debt repayment period to be extended.
- Borrow Money from Friends or Relatives
Bankruptcy will affect your credit score. If you don’t want to go that route, borrow money from close friends or relatives. The loan terms, in this case, are lenient with no strict deadlines. You’re sure your father cannot charge you 30% interested like lenders would do. Sometimes, you will even get interest-free loans.
This is why you should always keep close with friends and family.
- Sell Property
There is no point of driving a high-end vehicle, and you cannot service your loan. Tough times call for tough decisions. According to chapter 7 bankruptcy case, your estate will be reviewed by a trustee to determine if there is anything valuable that can offset your debt. There is not that will stop you from selling a property and use the proceeds to settle your debts.
- Resolve to Budget
People often fear being declared bankrupt. Not necessarily because if credit score but because bankruptcy will halt the borrowing cycle. Without access to credit, it would be difficult to afford some basic needs. Sadly, most people spend more than they earn. This is why borrowing spree is on the rise. As people live above their means, it means they have to borrow more to sustain their lives. Budgeting can be the only viable solution.
Cutting out on entertainment, movies, gym membership, clothing, among other unnecessary expenditures will free up your cash flow. If cutting down spending seems far-fetched, you can hire an attorney to advise you on the best way possible.
- Have a Side Hustle
You can look for a part-time job to help you sustain your bills and have more cash to offset your debts. Think about being a barista at a café during early or evening hours. Don’t shy from cleaning hospital floors after work. It will add a few bucks to your pocket.
Bankruptcy can be scaring. That’s why you’re advised to find a reliable attorney to help you sail through. Although it can offer financial relief, try avoiding it all costs. However, ensure you have a good plan in place.