Nobody wants to file for bankruptcy. As a society, we’re grateful that the option exists to support those who really need it, however, it’s a decision that can create walls for the future. These walls are never permanent but it’s an uphill battle to overcome them. There are many excellent techniques that can support people in avoiding bankruptcy so that they never have to take on that uphill climb. What are some things you can do now?
Manage Your Necessities First
When you’re trying to creep out of debt and avoid bankruptcy at all costs, the first you’re going to want to do is make sure the necessities are taken care of. These include food, shelter, utilities, transportation, and clothing. If find yourself at the very bottom, make sure you at least pay for food and utilities. Then make sure your rent or mortgage is caught up. Don’t pay anyone else until these basics are covered. It’s not okay to lose the house because your credit card company is getting cranky with you!
Sell What Isn’t Special
You have money hanging around in the form of DVDs, TVs, boats, clothes, books, furniture, tools, office supplies, craft supplies, and toys. Get rid of anything you don’t need. What is a need? Something that if it was gone your physical health would suffer. That sounds extreme, but when it comes to bankruptcy you’ll need to be dramatic. Take the money you make and put it toward getting bills up to date.
Create a New Budget
You’re trying to avoid bankruptcy and that means your budget has no room for frills. No streaming services, no cable, no huge cell phone plans, no dining out, and no vacations until you’re out of debt. Buy generic food, eat beans and rice, and drink water from the tap. Drink coffee you brewed and stay away from storms. Stick to your budget because drastic times call for drastic measures.
Get a Second Job
It might be tough but it doesn’t have to be long term. These days, it’s not uncommon to hear of someone working a second (or third) job. Having an additional source of income can help you avoid bankruptcy. Just be sure you’re putting the extra income toward paying off your debts. Getting a second job will mean sacrificing time with family and friends, and we know that’s hard. But remember—this situation is only temporary. You won’t have to live like this forever. If you live like no one else, so later you can live like no one else, the payoff will be worth all your effort.
Connect With a Financial Coach
Sometimes it’s best to sit down and talk with a financial coach when you need guidance with money issues. Don’t let that intimidate you. When looking for a financial coach, just make sure you find someone who has the heart of a teacher. You want a person who will walk with you and guide you along the way—not someone looking to take advantage of your situation.