To go bankrupt means to run out of enough money to pay your debts or to have liabilities more than the assets. In bankruptcy, an individual files for a specific chapter bankruptcy depending on his or her situation. The two most common bankruptcies are Chapter 7 and Chapter 13 bankruptcy. Although filing for bankruptcy helps you in discharging your debts, it is an avoidable serious decision.
Inability to get new loans because of low credit scores (Chapter 7 filing has more adverse effects than Chapter 13 filing), surrendering the personal property, the uncertain dischargeable status of the debts, different filing fee for each Chapter bankruptcy and costly legal help are some of the negative aspects of filing for bankruptcy. Thus, it’s important to completely understand the pros and cons of bankruptcy and the possibility of other options before you decide to file for it.
Given below are a few ways that might help you to save or earn some extra money to clear your debts faster and to avoid bankruptcy.
- Get rid of unnecessary expenses like streaming services, magazine subscriptions, extra data plans, eating out, gym memberships, etc.
- Take a part-time job like working at a coffee shop, baby-sitting, walking your neighbor’s dog, etc. You can also have a room-mate if you have a spare room. You can even use your car to sign up as a driver for Uber or similar services.
- Being a cash consumer can be a major lifesaver. Plan a weekly budget of necessary expenses and use cash to make purchases. Dwindling cash will stop you from going over-budget every week. Sometimes, a check can be used for making larger payments for necessary stuff.
- You can sell your unwanted belongings like branded sneakers, purses, sunglasses, extra furniture, books, and collection of movies, collectibles, or other fashion items, on online selling portals or by having a yard sale.
- You can refinance your house to get cash out of it. In refinancing, your mortgage, which is your secured debt (it has a low rate of interest than credit cards) can be used to repay unsecured debts with a high rate of interest. This way you won’t have to make high-interest payments in the future.
- You can try to negotiate a lower rate of interest or a repayment plan with your creditor, as most of them wouldn’t want to lose the lent money and would be glad to settle the situation with you.
- Last but not least, you can borrow money from your friends and family. But make sure that you’re clear about how you are going to repay them and discuss those terms with them, to avoid any stress and confusion in the future.
If even after following the above mentioned austere living conditions don’t fetch you sufficient money to repay your creditors, you might want to go for bankruptcy. Filing for bankruptcy is a serious decision, but it will give you the required relief when you won’t have any other options. You can consult experienced bankruptcy attorneys of Los Angeles & Dallas, TX, regarding all your possibilities at https://www.recoverylawgroup.com/ or 888-297-6203.