Debt is ubiquitous in the USA and it can prevent you from living the life you want to live and building the kind of wealth you desire. Sometimes, bankruptcy is the only good solution for people who are living with overwhelming levels of debt, but due to its impact on your credit score, the potential loss of property, and various other factors, many people wish to avoid bankruptcy if at all possible.
With that in mind, here are some tips that could help you prevent bankruptcy right now:
Cut your expenses
If you want to avoid bankruptcy, you need to raise as much money as you can so that you can start paying off as many of your debts as you can as quickly as you can. One of the best ways to do this is by really cutting back on your expenses. From cutting the cable to getting rid of your car or even selling your house to a company like FasterHouse, for a quick sale so you can downsize, the more sacrifices you make, the quicker you will be able to get back on track and avoid bankruptcy.
Talk to your creditors
A lot of creditors, when you inform them that you are trying to avoid bankruptcy, will work with you to negotiate a better deal such as freezing your interest or lowering your monthly payments for a while. After all, they want to get all the money back that they have lent to you, and if you go bankrupt that is less likely to happen. So, it is always worth calling your creditors and opening up negotiations with them.
Pay off the biggest interest debt first
If you want to avoid bankruptcy, you can’t afford to pay off your debts in a random fashion – you need to get organized. For most people, the best way to get on top of their debts is to work out which debt is adding the most interest each month and go all out trying to pay that off asap, Of course, you still need to make the minimum payments on all of your other debts, but if you have anything left over, pay it all towards that large interest debt and you’ll soon start seeing progress.
Talk to a debt management service
If you are really struggling to make much progress in your efforts to become debt-free and avoid bankruptcy, it may be worth talking to a good debt management service. These services can negotiate with creditors on your behalf, help you better organize your debts for a more effective repayment strategy, and even help you to pay off your debts in one monthly lump sum, which can really help to alleviate your stress.
Hopefully, you will be able to void bankruptcy, but if you do end up at that point, it’s important to know that it isn’t the end of the world and many people have bounced back from bankruptcy to be successful in later life!
(Disclaimer: This content is a partnered post. This material is provided as news and general information. It should not be construed as an endorsement of any investment service. The opinions expressed are the personal views and experience of the author, and no recommendation is made.)