Bankruptcy is an experience you should ever dream of having since it comes with a lot of misfortunes in financial life, social and even personal health might fall a victim. Bankruptcy is the failure or unableness to pay debts which lead to absorption of your property by financial institutions to auction to recover the money you borrowed. It does not occur because you care less but due to failure to plan or even some financial crisis that may lead to bankruptcy. Then what should you do when you realize you are heading in this direction? Bankruptcy can make you do crazy things like suicide to avoid the public shame or even make you suffer from stress related sicknesses such as blood pressure due to the stress that comes with the experience. Here are ways that can help you avoid bankruptcy.
- Settle your Debts in Time
Bankruptcy is a measure taken by the financial institution to pay your debt which is an awful situation which might make you poor forever. It’s wise to ensure you plan on how to repay your debts in time to avoid this shameful experience. In case you realize you might be heading to bankruptcy is better you consider consolidating your debt instead of letting your property being taken for auction to clear your debt. Consolidation of debt helps you to consolidate all your loans into one manageable loan with lower interest than when you pay each loan independently. You can negotiate the repayment plan that fits your monthly with your creditor to avoid any consequences once you fail to repay on time as is simpler to pay a loan within you income rate. The agreement with your lender may help reschedule your repayment plan to reduce the monthly payment and increase duration to pay to make the loan repayment flexible.
- Consider Selling Some of your Property
Settling your debt is the only option to avoid bankruptcy thus you should try all means possible to repay your debt before your creditor takes action to auction your property to clear your debt. Avoiding bankruptcy may require you to sacrifice some of your luxuries and assets to remove your name and build a good credit record. The creditors once they take your property sales at a throwaway price only to raise the amount you failed to repay and on top leaving you with bad credit record which means no other creditor may consider lending you money since you loan defaulter. To avoid all this embarrassment, you can sell some of your property to raise the money, repay and stand a chance to borrow again later since you will have a good credit record. Also, consider going for financial counseling for advice before deciding to file for bankruptcy which may lead to long term implications.
- Consider All Options you have to Raise Funds to Pay the Debt
Avoiding bankruptcy is all about raising money to repay your debt. You can consider borrowing the money from your friends of family members and then pay later when you are financially stable. Make your creditor understand your situation and give you the information about how much of money you need to avoid bankruptcy to enable you to plan on how to raise the money. Sometimes like the time you are heading for bankruptcy shun your pride and borrow from your friends or family members who can even sacrifice some of their property to raise the money. Real friends will never let you file for bankruptcy since they understand the implications that come with it and may even reduce you to nothing in just a moment.
Also reduce your frivolous expenditures such as the money you use for entertainment, going for restaurants when you can take meals at home and any other nonbasic expenditure to help raise funds and avoid filing for bankruptcy. If you stay in rental residential, consider opting for cheaper option to save that money.
Conclusively avoiding bankruptcy should be your priority as the situation has a very long term implications in your life. Remember the property you have you did not buy in one day it took time, sacrifices and losing your wealth in a day is something you will never like to happen in your life. The bankruptcy leaves you with terrible credit record that will make every creditor avoid lending you. On the other hand, you will have a lot of stress that may lead to sicknesses hard to cure and leave you in deep financial crisis.