The U.S. economy is continuing to recover from the devastating financial collapse in 2008. The good news is that after a peak in 2010 of bankruptcy filings under Chapter 7 & 13, the numbers are finally starting to fall. It may not seem like much, but there has already been a 10% drop in Chapter 13 applications since the beginning of 2018. For those that are still reeling from financial troubles, any positive news is good to hear. Even with the improving economy, it still may not take much of a financial blow for many people to be in real trouble. Bankruptcy is an option to help you pay your debts and start fresh, but it should always be the last option. If you are struggling with money and feel like you are under an immovable mountain of debt, you should first talk to a qualified bankruptcy attorney like the pros at tariolaw.com to discuss your options. However, there are several things that you can do on your own before you seek legal counsel to help you avoid bankruptcy. Here are some of them.
1 Pay Down Debt
This may seem like the obvious solution, but it may seem like an impossible task. You should start by drawing up a strict household budget to give you a clearer idea of where all of your money is going. It’s time to tighten your belt and focus on your necessities first. Try to eliminate costs by lowering your entertainment budget, dining out, expensive internet and cable packages, and wasted money on unneeded luxuries. Start with paying down your debts that hold the highest interest rates. You may even qualify for a consolidation loan that can help you to manage with a lower monthly payment. Stop paying only the minimum payment on your debts. When you only pay the minimum, it can take you years to start bringing your principal amount down. If you are living well outside of your means, you need to reevaluate your lifestyle. Start by taking on more hours at work or even taking on some extra part-time work to help make your payments.
2 Sell Assets
Everyone has something that they can sell to make a bit of money. It may not be the most desirable solution for many, but it’s a great start at paying down your debt. Here are just some of the items that you could sell to help make your payments.
- Car or truck
- Recreational vehicles and ATVs
3 Work With Creditors
Your creditors may go a long way to get their payment when the option is getting nothing at all. Be proactive by contacting your lender and explaining your situation. Let them know that you are having financial troubles, but you still want to be able to pay your bills. You may be able to negotiate a new repayment arrangement that includes lower monthly payment or a lower interest rate. You can also get advice from a credit counsellor to work with you and your lenders to come up with a better solution.
Worrying about money can be one of the ultimate stressors in life. Taking action and dedicating your effort to paying down what you owe can help you get back on your feet. Bankruptcy should always be your last option and not a rescue alternative. The long term effects of filing for Chapter 7 or 13 can follow you for years. Make a plan and follow some of these steps to get you moving in the right fiscal direction.