Last Updated on Feb 25, 2020 by James W
Are your finances in very bad shape and you are in fear of filling bankruptcy any day? If so rethink your circumstances to find out ways in which you can get back control over finances and avoid bankruptcy.
The most important thing to do is to know where you stand with your finances and how you can amend your condition. Reckless spending habits may entangle you in the cycle of debts but it is not that you cannot shake off. With systematic planning and research you can counter them successfully. So do not hesitate to take any steps that may help you stay away from bankruptcy filing. It is something you would definitely not want to get into.
Given below are a few ways to avoid the state of bankruptcy the best possible way:
- Analyze your financial condition: Filing bankruptcy hampers your credit score to a great extent. So before you take any drastic step make sure if it is absolutely necessary. You need to remember that the negative markings of bankruptcy will stay on your credit report for nearly 10 years. It will also hamper your chances of getting any credits in the future. So, if you find that your financial condition is not that bad reconsider your other options. If you are not sure of the alternatives you can look for professional help.
- Make the minimum payments: Try to take small steps to improve your financial position. One of such step is to make the minimum monthly payments on your bills. Find other sources of income to fund your bills in order to avoid defaulting on your payments. Make sure that you keep up with your payments no matter what it takes.
- Follow a budget plan: There is never a better option to recover than gaining complete control over your finances. Plan a monthly budget and divide your income and expenses. Cut down all the expenses that are unnecessary and limit your spending to the bare minimum. If you can save some money you can use them to pay off some of your bills. By following a proper budget plan you can certainly get your finances back on track.
- Negotiate with your creditors: If you have a number of debts to negotiate with your creditors and request them to reduce the amount or interest rates. Let them know of your poor financial condition and the fact that you are unable to pay your bills. If you are honest about your transactions there is a possible that you can get your debts reduced.
- Look for additional income: When you are passing through a tough financial condition you need to find options to supplement your income. Your primary income may not be enough to meet all your expenditure or bills payments. In such circumstances you can take up a part time job or can work from home on various projects to get some extra money. You can utilize this money to pay off your dues without hampering your monthly budget plan.
Author bio: Jonny Pean is financial writer and guest blogger. He loves writing articles that can help readers resolve their debt issues and stay away from bankruptcy. He is also an avid readers and loves to travel.