Bankruptcy is a complicated situation for any individual to be in. It is almost always advisable to seek professional help or counsel from a bankruptcy attorney or someone who specializes in bankruptcy debt management.
In terms of one’s financial future, it is usually preferable to avoid filing bankruptcy if that is a feasible possibility. This means figuring out a way to handle your debt without having to liquidate your assets and sign over your financial independence to a bankruptcy trustee. There are services that can help you do this. Additionally, there is an abundance of free advice available to people that want to improve their financial status without hiring an attorney. Options include negotiating with creditors, restructuring your debt, consolidating your debt or, in some rare cases when no assets are present, doing nothing at all.
In general, though, choosing to manage your debt instead of filing for Chapter 7 or Chapter 13 bankruptcy likely means you must change the spending practices that got you into your financial mess in the first place. If a person with spending problems tries to overcome a massive debt by being more fiscally prudent, they may have a hard time making any real progress.
Here are some tips that one can follow for trying to manage their debt and avoid bankruptcy in the first place.
1. Be honest about your current budget and spending habits. Are there ways you could cut back on what you’re spending? Even small changes to your habits—like eating out less or using public transportation instead of a personal vehicle—can help you on the road to financial solvency.
2. Don’t avoid your creditors. Oftentimes, they are willing to work with you to create a feasible repayment plan. Remember, if you file for bankruptcy, it’s possible that the court will cancel your debt, leaving the creditor with none of the amount owed to them. Simply ignoring the problem will not make it go away. Facing it head on through negotiations is a more productive approach.
3. Face your biggest debts first. It may be tempting to pay off the smaller, more manageable sums first, but avoiding large debts—especially ones with high interest rates—will only get you into further financial trouble, harming your credit rating even more.
Ultimately, facing your debt is about taking responsibility for past financial mismanagement and setting a new course for the future. Getting professional help is a good move, but it’s mainly up to you.
Finance happens to be one of John's favorite things to write about. If you'd like to find out more about Bankruptcy attorney, please visit http://www.maceybankruptcylaw.com/
I'm Louida from Atlanta, Georgia and I'm a mother of two daughters, blogger, and full time working mom at a Business Consulting Firm.
I love helping others learn how to start working from home on the internet free to supplement their current income.
I also blog at Productreviewmom.com
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