A person’s problems in life are never-ending, and when one problem is solved or overcome, two more have replaced it. The cycle continues on and on. This is the same story with debt. Debt can be reduced, but they’re always comes a time when the debt needs to be eliminated from your life before it becomes too much to handle. You can escape bankruptcy and regain control of your life again by following these simple steps:
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Slash your Expenses
The situation of the nation is not good at all. The country has been experiencing a lot of downturns economically for some time now. The recession had hit the only world-recognized economy, and it is expected that things will not change anytime soon. If you want to be wise in dealing with your money, this article might help you start. You can get advice on how to slash your expenses and make that money last for you.
If many people still think it is very hard to cut this expense, the truth is that it is not. The first tip in slashing down your expenses is that you have to find ways in which you will be able to reduce spending when going out with friends or family. There are many ways to do this, and one way is by having a home party instead of going to bars or clubs.
Another tip that you can do when slashing down your expenses is to shop for groceries at cheaper places like supermarkets. If possible, go to shops where they sell things at lower prices compared to other places. This will not only help you in slashing down your expenses but also help in saving more money. You can even buy bulk groceries and stop buying expensive snacks or chocolates.
Another way is by switching off the lights and appliances in your house when they’re not needed. This might sound like an old-fashioned tip, but it can still help you cut your expenses.
When slashing down your expenses, you have to be very creative and smart in thinking of ways to save money. You have to remember that this is not the end but only the beginning. When everything fails, then start considering bankruptcy as an option.
Negotiate with Creditors
It is possible to negotiate with creditors to avoid bankruptcy. The most important thing about negotiating with your creditors is having an action plan once the negotiations are over. Once the creditor comes up with a settlement offer, you can then discuss it with them and develop a schedule for paying back the debts.
Negotiating with creditors is beneficial in so many ways. For one, it can help you keep your credit intact. Also, you have the chance to come up with a repayment plan that is tailored to suit your needs and budget limitations. It also helps you avoid paying legal fees for bankruptcy proceedings. Understanding the other party’s perspective is very important when negotiating with creditors. Ask them about their side of the story, which can give you a better picture of how they would like to see things.
Many companies do not like going through bankruptcy proceedings, so you need to understand the terms they are offering fully.
One way of negotiating with creditors is by asking them for time, giving you a chance to develop a settlement plan. They will most likely give you a deadline, and if you can pay them back, this should be good. It is also important to understand the other party’s perspective to make your argument more convincing.
In addition, you can get a loan from reputable online lenders like Growing Power, even if they have bad credit.
Prioritize your Debts
A lot of people have a way of escaping from bankruptcy by prioritizing their debts. This means paying off the debts with high-interest rates before going to other creditors who charge a lower interest rate on a particular debt. For instance, paying off a credit card with an 18% interest rate may be possible while settling other accounts with a lower interest rate. If you can pay off this one credit card, you will save a lot of money by not having to pay the high rate of interest on your other debts. This way of prioritizing your debts is possible when they are from various creditors and not just one or two entities.
Prioritizing debt is a good way of getting out of bankruptcy because you can save money. You can also continue with your lifestyle if you are sure that all the other creditors are paid off before moving over to your other accounts with lower interest rates. This practice is common among people who need to go through bankruptcy proceedings but still want to keep their lifestyles largely unchanged even after bankruptcy.
The Priority list can be prepared even before you go through the first meeting with the bankruptcy trustee. This way, you will already know what to expect. Remember that you cannot escape from your debt obligations once you are under investigation for bankruptcy proceedings because if it is found out that you have money stashed away somewhere, the entire process will be declared null and void. This means that you can keep your accounts which charge a lower interest rate but only when they are in good standing and not when they fall behind on their payments.
Your priority list will indicate how much money you need to clear off certain debts, and in this way, it helps in planning out the overall bankruptcy proceedings. You are not required to declare your assets or provide any additional information which creditors may want. You are being honest by declaring the exact amount of money you have, no matter how little it is.
Be Wary of Debt Consolidation Loans
Debt consolidation loans are loans that you will use to pay off several types of debt, usually including credit cards, personal loans, or car loans. When you consolidate your debt into one payment, the idea is that it’s easier to keep track of and hopefully more affordable because the interest rate on these types of loans is lower than what you were paying in interest on several credit cards or loans. It’s a way of simplifying your bill payments and hopefully lowering the amount you owe each month. Not only is this idea simple, but it sounds like a great way to reduce stress in your life by making one lower payment every month that will give you more money to pay other bills or put toward savings.
In conclusion, therefore, bankruptcy is the worst thing you can do. It is surely better to keep paying your debts and suffer a little than lose all of your money and property. Debtors who file for bankruptcy may never be able to get credit again. This means they cannot buy cars or houses or even rent apartments – which will financially affect their entire lives.
It is very important to have some savings so that you can pay your bills. Always be prepared for the worst-case scenario by having at least three months’ worth of income saved up in an emergency fund. This will help you avoid bankruptcy and being on the street again.