Learn how to avoid bankruptcy in 5 steps. See easy to follow solutions to reducing your debt so you can avoid costly and financially destructive bankruptcy. True, while declaring bankruptcy may be the only way when circumstances are dire for a few, avoiding it at all cost is even more prudent. The effects are far reaching than often anticipated. Implement these practical steps today and see your "mountain" of debt disappear gradually before your very eyes.
Job loss, serious illness or injury, divorce, unsustainable credit card or other consumer debts, unforgiving and exacting creditors, and in some cases poor buying decisions and even a wrong financial association could bring upon us the pressure to give it in and declare bankruptcy.
Is that your experience?
In 1996 “a record 1.2 million Americans filed for bankruptcy, up 44 percent from 1994,” states Newsweek magazine. That shocking figure rose even further to 1.5 million Americans that filed for bankruptcy by 2010 and continues to rise.
But why is this number rising? It is certainly not just because people are getting poorer or because there is more pressure to buy now and pay later. One study showed that 45 percent of people who file for bankruptcy can actually pay off their debt! That is almost half of all those filing for bankruptcy.
Going bankrupt is not without its consequences. From inability to get future credits, insurance, and in some cases certain types of employment to having your bankruptcy kept on record against you for up to ten years, as well as its potential to affect your spouse or close business associate with whom you are in financial association, declaring bankruptcy certainly comes at a cost.
In addition to this, new laws make it even harder for many to use this solution for debt relief. There are excellent ways to help you to avoid bankruptcy altogether.
So, going bankrupt is not a decision to be taken lightly. It is important to emphasize though, that for some, it is the only way out. If that is the case with you, do not feel guilty about it. Speak to a bankruptcy attorney today to start the process. If you can avoid declaring bankruptcy though, you must avoid it. Here is how.
Here are 5 steps you need to implement today to improve your financial situation and ultimately avoid bankruptcy.
No matter what else you do to avoid bankruptcy, you need to realize that you have to develop a plan. A workable one you can really implement. And stick with it if you are to see any benefit. The long road will take time but it will happen. The frame work of your plan should include:
"It is common for a person today to have, on average, over $9,000 in credit card debt on four or more credit cards," states Michael Wagner in his 2009 book Your Money, Day One: How to Start Right and End Rich.
Unsecured debt is the number one reason that individuals file bankruptcy.
Individuals often have unsecured debt for a number of reasons but it is costly and it can continue to cut into your financial future. Begin today with only using cash to pay for your bills. It will immediately make a difference in the way you see money. So cut all your credit cards, store cards and return them.
Remember, this is exactly what would happen and be forced upon you if you were to declare bankruptcy. You can do this yourself and learn to stay away from credits until your "economy improves". It would be really hard and difficult initially, but you would come off better at the end.
For many, a debt consolidation loan that taps into the equity that they have in their home is the ultimate choice for avoiding bankruptcy.
You can do this by simply using the funds in your home to pay off your debts and then having this secondary loan to pay off each month. Although a personal loan is an option too, personal loan options are often limited to those with good credit.
Once you have taken steps yourself to implement the above steps, look online for a credit counseling organization or agency near you.
This must be government backed. Avoid the numerous debt counseling organizations out there who often promise to help you for "a small fee". Many have ended up paying them fees that could have gone into paying part of your actual debt without getting value for their money.
They may have access to government backed support and advice to help you manage your finances or approach your creditors more formally and avoid bankruptcy.
The following are well known credit counseling agencies you can start with, depending on where you live:
Yes. Get a second job if your health allows.
If you are in a lot of debt, and really want to avoid bankruptcy at all cost, the only thing that should stop you from being able to take on a second job should be your health.
What about doing an extra four hours after work at your local pub or gas station in the evening or early morning cleaning? Could you work for an extra Saturday or Sunday somewhere? If you are only bringing in an extra $100 per month after tax on your second job, in a year, that would amount to $1000 paid off your debt and in five years that would be $5000 paid off, plus anything else you could afford from your other job and budget.
No job where you live? What about spending an hour or two extra every evening working for yourself online? Seriously. If you can get a good internet connection, have a computer, and can type, copy and paste, then you have the skill needed to start your very own business online. All you need is the motivation and determination to succeed. Many many folks are already doing so and you can as well. See real life examples here of people who are now debt free by tapping into the power of SBI to free themselves of financial pressure. We highly recommend SBI as a powerful tool to help you lunch your business.
Learning how to avoid bankruptcy is challenging and it will take time. But, the benefits are many and well worth it.
While you will have to put yourself through a lot of stressful restrictions to help you get back on tract, you would have the peace of mind and dignity of being able to pay off what you owe without a forced restriction on you by the courts.
You would also be able to get back to using credits if you so desire in time - not after 10 years as with bankruptcy. It would be an experience that may put you in a better stead as per how you control your assets. It is really worth the effort.
If you want to learn directly from someone who has successfully fought the system and avoided bankruptcy through the courts, here is a link to his paid membership site where he coaches members on how to avoid bankruptcy by engaging unforgiving creditors.