Bankruptcy can get rid of your debt, but tt can also cause your financial life to take a hit. Bankruptcy stays on your credit report for seven years, so it may be difficult to get approved for loans. That’s why filing for bankruptcy should always be done as a last resort. Follow these tips to avoid filing for bankruptcy.
- Make a Budget
Create a weekly or monthly budget so that you know exactly where your money is going. Write a list of all your expenses and estimate how much money you spend on each expense. If you make an effort to stick to your budget, you can avoid spending too much money.
- Get Rid of Expenses You Can’t Afford
If you can longer afford certain expenses and they aren’t a necessity, you can always eliminate them. For example, if your cable bill is getting too expensive, cancel the service and order Netflix of Hulu. If your Internet bill is too high, see if you can switch to a provider that offers a cheaper rate.
- Live Frugally
If your goal is to avoid bankruptcy, you may need to be more frugal. Living below your means can help you put more money in the bank. Try to save at least 10 percent of your paychecks. It may be difficult at first, but it’s well worth the effort. If you have money stashed away, you will have a peace of mind knowing you are prepared for any emergency that may come your way.
- Negotiate Existing Debt
Being in debt can lead to a lot of stress and may even cause you to lose sleep at night. Luckily, you may have the option to negotiate your debt. Contact your lenders or creditors and ask for a lower interest rate or for your total debt amount to be reduced. Many creditors are willing to negotiate to debt because they want to be repaid. If you file bankruptcy, these creditors won’t receive any money.
Bankruptcy should never be taken lightly. It can have a negative impact of your financial life for a long time. If you follow these tips, you can avoid filing for bankruptcy. If you have any questions regarding bankruptcy, you may want to set up a consultation with an experienced bankruptcy lawyer Peoria IL can count on. He or she may inform you of all your options and help you decide if bankruptcy is the right option for you.
Thanks to our friends and contributors from Smith & Weer, P.C. for their insight into bankruptcy practice.