While filing for bankruptcy might be an option you have, it should be viewed as a last resort. It will essentially destroy your credit, which you want to avoid if possible. This article will give you some tips and advice for avoiding this course of action entirely. There are quite a few things that you can do to get your finances back on track. The more committed you are to doing this, the more successful you are likely to be.
Stop Using Your Credit Cards
If you own any credit cards, it is important that you avoid using them as much as possible. You shouldn’t cut them up like some people suggest, but certainly limit your usage. This will help to keep you from sinking even deeper into debt. Credit cards can be very helpful in many situations, but they can also work against you. This is why it is so important that you are careful about using your plastic.
Make Sure You Have a Budget in Place
Anyone who doesn’t already have a budget in place for their household is just asking for trouble. You need to have a very clear picture of how much you make after taxes and what all of your expenses add up to. This is a very important first step in being a fiscally responsible adult. If you don‘t have a budget made up, you’ll need to do this right away.
Try to get Lower Rates
Those who have a substantial amount of credit card debt should at least attempt to get lower rates. There is absolutely no harm in contacting your bank or credit card company to inquire about this. While they might decline to lower your rates, you could end up getting a better deal. This is something that you should at least try doing, as it doesn’t really cost you anything. If you have managed to improve your credit lately, there is a good chance of getting reduced rates.
Look into Debt Consolidation
Getting a loan to consolidate your various debts into one monthly payment could be just what you need to avoid bankruptcy. This is an option that can help you out in a very real way, but you want to be careful. Consolidating your debt is only a good idea if you can obtain a better rate from a lender. Spend some time researching different lenders to see what kind of deal each one can give you. You only want to consider this option if you have a substantial amount of debt.
Cut Back on Your Expenses
If you are teetering on the brink of bankruptcy, you’ll want to save money any way you can. This means taking a look at your regular expenses and eliminating whatever you can. You might have to go without your cable subscription or internet for a while, but it could be worth it. Take the time to sit down and see what you can cut back or cut out of your budget altogether.
Figure Out Your Priorities
A person’s financial priorities will ultimately determine where they are going to end up. You need to make all of your essential expenses (rent, utilities, etc.) a priority. When you start getting behind with these basic bills, it can be hard to get back on track.
When it comes to paying off your debt, you should prioritize the loans or credit cards with the highest interest rate. This will help you limit the damage that your debt is doing to your finances. It might seem like you are fighting an uphill battle, but this will make a very positive difference.
Get Help from a Credit Counsellor
There are numerous organizations throughout the UK that offer advice to people who are deep in debt. Sometimes these services are free but not always. It is important that you spend some time looking into this option before making a choice. The advice you get form these professionals could help you avoid bankruptcy.
Sell Some of Your Assets
If you have a vehicle that you don’t absolute need or some other valuable asset, you should consider selling. While this is never an easy decision to make, it could be necessary. Take stock of all of your assets so you can determine which ones if any you can afford to part with. This could be enough to help keep you from going bankrupt, at least for the time being.
Filing for bankruptcy is never something that you should take lightly. There are some serious implications that come with doing this, so you should think about all your alternatives. If you are willing to make the hard decisions, there may be a chance that you can get through your financial troubles with having to resort to this.