Filing for bankruptcy might seem like an easy way out, but before you do so, it’s important to consider other alternatives. That’s because there are certain consequences of declaring bankruptcy. For instance, if you have filed for bankruptcy, you have to attend credit counseling and financial management education. Let’s look at some ways to help you avoid bankruptcy.
Perform a Budget Overhaul
If you want to avoid bankruptcy, you need to take a close look at your budget. If you look at your spending history, you can easily figure out ways to downsize your budget. The whole point is to make sure that you’re spending way less than you earn. So, start by looking at your income while also keeping in mind that things like child support are considered as income. In fact, child support income accounted for over 70.3% or two-thirds of the average annual personal income for custodial parents below poverty who received full child support.
In any case, once you have figured out your income, the whole point is to spend less than that. Fortunately, there are ways to downsize your spending, including driving a cheaper car or eating out less.
Consolidate Or Pay Down Your Debts
Being over-indebted can leave you wondering if you should file for bankruptcy. Fortunately, there are other debt management options you can look into it. If you can, consider paying down your debts to the best of your abilities. This will be easier once you have managed to reduce your spending. You’ll have more disposable income that can go towards paying down your debt. If you keep it up long enough, you’ll be able to reduce the size of your debt. Similarly, debt consolidation combines all your debt into one account so that it’s easier to manage.
What to Do If You Can’t Avoid Bankruptcy
While it’s ideal to avoid bankruptcy, sometimes you might not have an option. In that case, the most important thing to do is hire a bankruptcy lawyer. If you’re filing for bankruptcy, there are many advantages to having a bankruptcy lawyer represent you. A bankruptcy lawyer will help you navigate the legal process, and they will also negotiate on your behalf with creditors. To make a long story short, a bankruptcy lawyer will make the process of filing for bankruptcy less stressful.
So, while you can avoid bankruptcy by reducing your spending and finding ways to manage your debt, this isn’t always feasible. If you can’t avoid bankruptcy, then it’s best to work with a bankruptcy attorney.