Let's talk about avoiding bankruptcy and what happens in each case. Some options are more favorable than others, and once you explore all the debt relief options, you may find that bankruptcy is best for you.
1. Make more money
In fact, this is no doubt. When you want to get out of debt and avoid bankruptcy, the best thing you can do is to make more money. I know it's easier said than done, but have you really explored innovative out-of-the-box methods to increase your monthly income? Here are some suggestions I have helped my past clients:
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Rent a house to create rental income; -
Looking for a second job; -
Require a salary increase for the current job; -
Let the children go to work, if they are working, stop paying their fees; -
Have a store, or sell items that you no longer use on Craigslist; -
Start repairing or reusing the project for resale
2. cut the expenses
There are only two aspects to the budget ledger; income and expenditure. Another best strategy is not only to increase revenue but also to cut expenses. The rest of the money can be used to pay off debt and avoid bankruptcy. Here are some of the often overlooked ways to cut spending:
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Transportation: Reduce transportation costs by public transportation. You will be surprised to find that your stress will drop with public transportation. If you plan to drive, make sure your car is well maintained and rewarded. Maybe you need to downsize and get a cheaper car to reduce car payments. -
Insurance: You can reduce your home and car insurance costs by checking the number and type of insurance policies you have. If your car is older, consider reducing any physical damage [full/collision] and only retain responsibility. The liability limit for an insurance policy only needs to be sufficient to protect your assets. So if your car and home don't have equity, you don't need high-limit insurance. In addition, purchase insurance. -
Utilities: turn off lights and air conditioning. Cut mobile phone bills or cut landlines. Call each company to reduce the amount of service that can reduce bills or completely reduce bills. -
Groceries: Buy shampoos, soaps, toothpaste, cutlery and laundry supplies with coupons and use coupons only in meaningful places. Paper products are another big household item that is purchased on coupons. Reduce your grocery bill by planning a weekly meal before shopping, and consider other meals that can use similar ingredients. Cooking at home not only saves money because it is cheaper than eating, it can also help you live a healthier life.
The consequence of tightening the budget by increasing revenues and reducing expenses is that this is a long-term lifestyle commitment that can take more than five [5] years to repay all debt. Even after maximizing this strategy and using all disposable income for debt, this may not be enough and you may still face bankruptcy. However, I still believe that knowing your numbers is an important step in financial transformation and debt elimination, no matter what direction you take.
3. Debt settlement
If you pay for a credit card, they can negotiate; sometimes it is a penny of dollars. This may seem like a money-saving strategy, but it can make your credit score at a glance. First, you need a huge savings account so that when you close a deal, you can pay in one lump sum to pay off the debt. Be sure to get any settlement in writing and ask them to remove the transaction line from your credit report. You may not be able to get credit cleanup, but ask either party to be harmless. If you have only one or two debts available, this can be a valid method of debt settlement. In addition, bankruptcy cases will be a cheaper, better, faster way to get rid of multiple debts immediately.
The consequence of debt settlement is that you not only have to pay off your debt, but it can also negatively affect your credit.
Orignal From: How are the consequences of a bankruptcy alternative?
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