Bankruptcy is one of the hardest financial realities that adults have to admit to themselves. When faced with the step, there are several things that can be done to avoid it all together.
Make some cuts backs
You will need to find the most expensive things that you can live without and end them. Your cable or satellite television or your fast food stops. Decide what in your life you can survive without and take it out of the budget. If that favorite coffee shop relies on you for a daily dose, it won’t any more.
Next, you can either have a yard sale for quick cash, or you can start selling online. If you have a cluttered home, and you should get rid of some things, then this is the way to start. If you have some items that are a little more elegant, then eBay and Craigslist may be the way to go. Either way, you are doing this to help out and pay some things off.
Refinancing
Consider refinancing your home and reducing the amount of insurance you have on it. It won’t feel good, but only what you think you can get by with. The refinancing will reduce the payments and even the percentage you pay on the house. It’s really a long term win/win situation.
Fix the car loan
Don’t be afraid to approach your bank or loan institution and ask for an extension on the loan, or refinance the whole loan. It will increase the overall amount you pay, and it can reduce the monthly amount you dole out. When you finish there, reduce the amount of insurance you have, but keep it within the loan restraints, for an even bigger savings.
If you don’t have a loan to worry about, then don’t be shy about the insurance and get it reduced. It can only help.
Get rid of things
Delve into your credit cards and see which ones you should get rid of. See if you can get your interest rate lowered and find out how much you can pay without penalties or late charges.
Horrors
The last of the fun things, just became the last of the fun things. Meaning, you don’t get to go out. You don’t get to have a date night and you don’t get to see the inside of the movie theater for a while. Pinch your pennies and find other ways to have fun…… like scrabble. As boring as that may sound to some, it will be alright for others.
Your grocery shopping just went from brand name to store brand. It’s not a very attractive thing, and it is a giant compromise in flavor, but in the long run, it will help.
Start a garden and grow all the items that you use the most from the produce section. It will help keep those costs down and bring some wonderful home grown flavor into your kitchen.
In the end
If in the end you can pay some of the debt off and walk away without going for bankruptcy, then it was all worthwhile. And if you come up with some healthy new habits that are an overall good thing, then it all was worth the trip.
Bankruptcy is not something to enter into lightly and if you can avoid it all together you should. It tends to take things that help with your day to day routine, and you have to go in front of a judge that will determine your fate. So, take a deep breath and decide what you want to do.
Photo Credit: Flickr/Brent Payne
