How one can avoid any kind of bankruptcy filling?
Cut your expenses
Your ultimate goal is to use as much money as possible to pay off your debt each month. This means cutting costs drastically and making serious sacrifices in your life.
This will almost eliminate all discretionary expenses immediately. Things like movies, dinners, buying unnecessary clothes, expensive hairstyles should come first. Then try to cut your grocery and utility costs. Downsizing to a smaller home or a cheaper car may be an option, as long as your loan is good enough to secure a finance or lease agreement.
If you need help setting priorities and cutting budgets, help is provided by certified credit counselors or bankruptcy lawyers near me.
Talk with your creditors
You should contact your creditors as soon as you learn that you are unable to meet your monthly payment obligations. There are no guarantees, but in some cases, creditors will agree to lower interest rates, change payment terms, or lower fees.
Some money is better than no money for the credit card company thus they can agree on some things. Also with BLC Law Center experience that credit card companies are most likely willing to negotiate.
Always remember that if you can come to an agreement with a lender, you will stick to it. Most of them don’t want to negotiate twice.
Prioritize your debts
One mistake many people make is not prioritizing how they should pay off their debts. Don’t pay off your debt carelessly, You must have a plan.
The budget to pay for “absolute necessities” first, such as housing, transportation, food, supplies, and all legal obligations such as child support.
Then focus on the debt with the highest interest rate. Make minimal payments for necessities and other debt and put as much money as you can on your credit card or loan at the highest level. When you have paid the highest, move on to the next higher, and so on.
Also, remember in many cases, student loan payments could be reduced or delayed if the borrower was in extreme financial difficulty. “Take advantage of this if you can,” he added, “but make sure you don’t forget the compliment.” You need to know when the suspension ends to avoid punishment or offense.
Debt consolidation loans need to look carefully
A debt consolidation loan sounds like a quick and easy fix. You are given a loan – with monthly payments – and use the proceeds to pay off all your debts. When you get an equity loan for this purpose, your home is used as collateral. As a San Diego bankruptcy attorney, we don’t usually advise my clients to get debt consolidation loans. In our experience, we have never seen this as a viable solution.
According to some sources, debt consolidation is a bad choice, mainly because consumers feel they have overcome the problem and are unable to solve the underlying problem, namely poor financial management. Also, debt consolidation can be more expensive in the long run if you take interest rates and fees into account. And when you borrow to consolidate debt, you run the risk of losing it.
Increase Your Income
Increasing your monthly income could give you extra money to put toward your debt. If you can, pick up extra hours at work, apply for a part-time job, or start a side hustle to bring in extra cash.
Alternatively, you can sell any spare items, such as furniture or jewelry, and use the money to pay down your debt balances. The sooner you take action, the better. If you wait until you’re behind on payments, it may be too late to catch up and avoid further action from your creditors.
We understand it’s not easy to file a bankruptcy mentally and physically too but if nothing works for you the filing bankruptcy is the best idea for you. BLC Law Center professional San Diego bankruptcy attorney can help you in this as we are experienced and know how to handle such cases. Contact us today if you are looking for a bankruptcy lawyer near me.