to avoid bankruptcy?
for bankruptcy should be the final resort, not the first step
you think that filing for bankruptcy will
solve all your
debt problems, you are being misled by someone.
Bankruptcy filing can come to haunt you for years and that
is why this decision should be taken after careful analysis
and deliberation. Plus, you should do your research to
explore other alternatives like
debt consolidation, loan
deferment, grace periods, etc. to see if you can avoid
bankruptcy. (Related article:
Oprah highlights America's debt diet crisis)The disadvantages of filing
So how can you avoid filing for
- Do your research by exploring what other
alternatives are available to you. You must speak to
your creditors to see if you can work out a different
payment plan while you solve your financial
problems. For instance, if you
lose your job and are
unable to make some payments, and if you have a good
credit history, most financial institution will work out
an arrangement under which you can avoid making full
payments till you secure a job (generally you will have a
finite time for this).
- Explore options for debt consolidation. This is one of the easiest solutions
to avoid bankruptcy. (Related:
How to survive falling property prices)
- Change your financial habits
forever. As I always say, spend less than you
earn. (Related article: Financial
planning for retirement)
- You will need to make lifestyle changes (How
to stop overspending)
as well. For instance, you may have 200 channels of
cable television but might only watch it a couple of hours
a week. Believe me, there are a lot of good programs
on regular channels that you can watch and entertain
yourself. Similarly, stop buying coffee in the
morning (buy your own coffee and brew some fresh coffee
each morning at home), limit how many times you go out to
eat, bring your own lunch box to work, avoid unnecessary
trips in the car, don't talk too long on the phone, and
avoid any waste that you see in your life. (Related
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- Save all the time. The more you
save, the better off you will be.
- Buy insurance, particularly health
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