Is there any way you can avoid bankruptcy? Yes, there are several ways of avoiding this financial meltdown. All you have to do is know about them through this article and put them into use. Believe it or not, you’ll be surprised at how these simple steps can actually change your life.
The first one is to seek help from your bank. If you have been unemployed recently because of your company’s need for retrenchment, you should contact your bank and tell them about it. Most of the time, we let our banks take charge of our loans and bills such as mortgages, electricity bills, phone bills, and a few others more.
When your bank is informed early about your recent unemployed status, they will give you six months official consideration. What does this mean? It simply means that they will take care of your outstanding bills and loans for six months until you can get another job. It is a sort of bank insurance you, as a bank client, automatically have. You should bear in mind however that this kind of action is under the sole discretion of the bank. If you are a good payer and depositor, your bank won’t hesitate to give you this deal. But if you always have a bad reputation of late bills payment, then your request might be declined.
Another way of avoiding bankruptcy is making a list of all your debts and the monthly required payments you should be paying. This gives you a great overview of how much you should be earning each month to make ends meet. Of course, you should still consider the daily expenses your whole family is incurring and think of some ways to reduce it. Most of the time, a lifestyle change is the key to avoid to bankruptcy.
Is your wife’s weekly shopping spree making you loose more money? Is your toy collecting hobby getting more expensive? Are your extra-curricular activities such as traveling getting in the way of paying off your loans? Take some time to examine your current lifestyle. If your job or business can’t support all of these “wants,” you should consider disregarding them for awhile until you can splurge some money all over again when your current debts have been paid. I’m sure your family will understand if you explain to them carefully your present financial standing.
One of the effective ways of avoiding bankruptcy is to get in touch with your creditors. If you think that whatever lifestyle cost-cutting you are presently doing at the moment won’t still make enough money to pay off your monthly dues, talk to your creditors directly.
You shouldn’t demand anything from them because this might make the situation worse. Instead, you should request from your creditors for any other possible way to make your monthly payments a bit lighter. They may consider providing you with a lower interest rate or may even reassess your debt and require you to pay lower monthly payments. Again, if you have a good paying record, your creditors will be more than happy to assist you especially during this time of global financial crisis.
If you have any non-income generating assets such as an unused land or an extra car, you could always sell them to pay your debts. This should be done earlier once you have detected you are on the path to bankruptcy. If not, the bankruptcy official receiver will take these and all your other assets, including your home, and sell them for cheaper price in order to pay your debts. Don’t worry if you sold one of your real estate properties, you could always buy a new one after your financial crisis.
What can you do if you don’t have any extra assets to sell? Well, you can always get a second job to generate more income. But you should bear in mind that getting a second job doesn’t mean that you could spend more. You should stay on track and pay your current debts first before any splurging ideas tempt you into spending more. Spending more will just make your situation worse and give you more debts to pay.
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