Filing for bankruptcy can be an important and beneficial tool to help managing debt, as opposed to hiding from collection agencies. Of course, it’s always better to avoid the bankruptcy process and the need for bankruptcy lawyers entirely, but that can be much easier said than done. In fact, in 2014 alone there were 936,795 bankruptcies filed nationally.
Unfortunately, a lot of times the underlying reasons can be largely as uncontrollable as they are unpredictable. About 50% of those bankruptcy filers in 2014 had suffered from a serious health problem. In order to help you avoid the bankruptcy process altogether here are three useful tips.
1.) Sell Your Assets: One of the first things you can do to bolster your funds and give you the ability to keep repaying debts in a timely manner is to liquidate your assets. A term that gets tossed around in movies and financial papers really just boils down to selling ‘things’ for straight cash. Or some electronic equivalent in today’s world. Depending on how much you’re in the red will determine how extensive you’ll have to be. Start with the big-ticket items you own that can fetch a hefty penny. Big screen TVs, recreational vehicles, and extra property/real estate are all great luxuries, but certainly not necessary and can help keep you out of the bankruptcy process.
2.) Restructure Mortgages/Loans: Another strategy that can really help lift your financial burden is restructuring mortgages and loans. Two out of three people who filed for bankruptcy in 2014 recently lost their jobs and usually banks will work with you if that’s your situation. Extending a mortgage can decrease the amount you have to pay monthly and certain loans like government issued student ones can be deferred to a later date.
3.) Budget and Bailout: It’s the most obvious and simplest of tips, but potentially the most helpful. Learning how to properly budget your every day and annual expense can go a long way in helping to get your financial life in order. If even disciplined budgeting won’t be enough to dig your way out of debt, you can always ask for help from family and friends. It’s not something most people want to do, but a bailout from a loved one usually comes at a much cheaper rate than any loan a bank will give you.
The bankruptcy process is a great thing that can be used to the benefit of many individuals, but avoiding it altogether is inherently ideal. Follow these simple tips if you’re in a tough position and if all else fails use the bankruptcy legislation in place to your advantage best you can.