Bankruptcy can be the lowest moment of your life, given that you lose all your property, and it ruins your credit score for even up to 10years. But it might not be too late for you to find a way out. Check out these anti-bankruptcy tips.
Liquidate some of your assets
If you own some of the assets you can sell to earn some cash to reduce your debt, this is the right time to do it. You can sell items such as jewelry, furniture, car, and houses if you have more. However, ensure you consider its impact on your personal life. Also, find out how you can sell these assets to get the most value out of them.
Get rid of unwanted expenses.
Go through your monthly budget and eliminate all your unnecessary expenses. If you are paying for any expenses you don’t need, such as gym, high-priced phone plans, club memberships, eating dinner out, paid transport, unnecessary travels, etc., eliminate them early. That leaves you with some extra cash on the table to pay off your debts.
Sell some business assets.
If you have a business and some items lying around idle in your office, it is time to liquidate them. For instance, if your employee parking space is more than you need, you can consider renting out some of the space to earn you some extra cash. If you have computers lying around idle, you can sell them. Selling unwanted business assets leaves you with more money to reduce your debts.
Plan your debt payment
Regardless of your financial circumstance, there are some debts you must prioritize to protect your reputation. One of the top 10 ways to avoid bankruptcy is prioritizing your debts and having a payment plan. Some high-priority bills include payroll taxes, housing, utility, secured loans, and phone bills. From there, start paying the loans with the highest interest down to the ones with the lowest interest.
Talk to your creditors.
If you are on the rim of bankruptcy, a phone can could make a difference. Contact your lenders and let them know your financial situation. Some creditors will be willing to review the payment terms, reduce the interest fees or draft a payment agreement that works for you. It helps to reach out to all your creditors and request more favorable terms.
Ask for help from family and friends.
When you are short of options, you can ask your family and friends to help you offset your large debt. Sometimes falling into debt comes from uncontrollable situations such as abrupt disability, an illness, or job loss. You can appeal for help from your family and friends to help you pay a portion of the debt, and then you can pay them back over time.
Don’t ignore your creditors.
Your lenders might send you demand notices giving you a timescale to repay your debt. Rather than ignoring them, please reply and let them know your financial situation. They might make an informal agreement to allow you to pay your debts in manageable monthly amounts.
Seek an alternative debt solution rather than bankruptcy
A debt attorney can help you review your financial options to develop an alternative debt solution than filing for bankruptcy.
