The content is accurate at the time of publication and is subject to change.
Bankruptcy is a situation best avoided. It will be traumatic not just for you but for the people around you when such a situation is encountered. There are certain ways you can avoid a situation as extreme as bankruptcy and here is how:
In order to keep pace with our hectic lifestyle, we tend to take shortcuts. One of the repercussions of such a lifestyle is erratic spending and sooner or later we are sure to be in debts. Once you get into a vicious cycle of clearing your debts and meeting your expenses, life could be very tough. In order to avoid all this, plan you expenses right. Make a list of your necessities and luxuries and set on a shopping spree only after prioritizing your needs.
If you are not very good at managing finances and find it difficult to understand the balance between assets and liabilities, seek financial counseling. This will help you gain a better understanding of handling your money right and chances are that you will not get yourself to a stage of bankruptcy.
Take a stalk of your assets and see if you can sell them when you think you are close to filing
bankruptcy. Once you file for bankruptcy, your credit score stands affected and you will have to legally declare that the assets can be given away to the creditors. Making the choice of selling them yourself and clearing the debts is a better choice. This will save you from filing for bankruptcy.
When you file for bankruptcy, it is not just you but also your creditors who will face many problems. Instead of prolonging for long, talk to your creditors and let them know about your financial condition. They may have ways suggestions on how you can handle the situation better. Being frank at the upfront will help you solve the problem faster.
If you are impulsive and make more debts to close the current debts, you are only complicating the situation further. Think before you make any new debts or use your credit card for a purchase.
Do not give up or get obsessed with the thought of going bankrupt. If you want to save yourself from bankruptcy, look out for opportunities that can help you earn more so you can clear your debts earlier.