If filing for bankruptcy has crossed your mind, you may want to reconsider, and opt for alternatives as the way out of your financial blues.
Filing for bankruptcy, legal minds will affirm, is a personal decision, but there are other recourses to your financial woes. It may be worth your time to assess the disadvantages of declaring bankruptcy. Among others, it leaves a public record that greatly affects or hampers new work opportunities or securing of a loan in the future when these are needed. Those in the military stand to lose their security clearance once they file bankruptcy.
Some bankruptcy alternatives include approaching or calling up creditors to map out a workable loan repayment plan, which will be smaller but stretched over a longer time. Monthly repayments are calculated according to what the debtor can actually afford to pay. With an Individual Voluntary Arrangement discussed with creditors, you can write off as much as 70 per cent of your debt. What’s more, an individual voluntary arrangement removes the court costs and professional fees that come with declaring bankruptcy.
These days, there are tailored bankruptcy alternative programs offered online, devising low monthly payment schemes designed to obliterate debt as quickly as possible.
Individuals weighed down by debt may also try applying for one big debt consolidation loan to pay off the outstanding amounts in your credit cards. Be wary, though, of using anew the balances of your credit cards to borrow and sink further in credit card debt.
While waiting for a bank to process the debt consolidation loan, you may also check out free seminars or courses offering to arm individuals with a better way of handling credit, reverting to good spending habits, and regular tracking of expenses and budgeting.
Being organized and preparing a budget that lists the monthly household income vis-à-vis the monthly household expenses will prove to be very useful. In so doing, you can eliminate unnecessary expenses and see where your money is going. Your primary task will be to ensure that your income goes to essential items, and not to countless unimportant ones that tend to accumulate with impulse buying. A great deal of discipline is therefore required.
Another alternative to filing for bankruptcy is to take several small steps that add up to financial freedom. One of these is to transfer the outstanding balance from your credit card, which may be fetching a high interest rate, to another card with lower interest rate. Turning to family and friends for interest-free loans may also help tide you over until you are able to consolidate your payables and pay them off with a single loan.
Credit assistance programs by reputable organizations with a good track record may likewise help.
You should also realize that in order to avoid having to file for bankruptcy, you may have to overhaul a spendthrift’s lifestyle and live simply. Learn to make do with basic clothing and personal effects, ordinary household furnishings, check out the benefits from Social Security that you may avail, and make use of free coupons for food or other essential items.
By taking control of your finances, you create a worry-free existence and enjoy life better.