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5 Smart Tips That Will Protect You from Bankruptcy

This is the consumerism era and we are all constantly surrounded by commercials offering us discounts and bargains for various products. And then banks and credit card companies promoting offers that could help us buy those things even if we do not have the financial means. And so, the debts arise one after another and sooner or later we are facing some serious repercussions for spending more than we can handle. Some of us might even have to file for bankruptcy as a last resort, but has it really come to that?!
So try these five smart tips how to avoid doing just that. They might not contain a magic formula like an inheritance from the aunt you did not know you had popping out of thin air, but they will help you turn the situation for the better.

Be responsible with your money.

This is probably the hardest thing to do, but using some prudent planning and sticking to it will get you far. For example, do not buy things just because they are on discount and try some cheaper versions of the same product. If you are planning some bigger expenses, such as home renovation or a new car, be an excellent researcher and find the cheapest fit for the desired quality. Make a list of all your incomes and all your unavoidable monthly expenses, like the electricity and phone bill, for example. And then make a spending schedule with what is left of that money.

Make an appointment with your creditors.

Most of the time you will be able to negotiate the debt with your creditors. Make an appointment and present your case, let them offer you the most acceptable payment plan. It is in both your interest to settle the debt, so this might be beneficial for both parties. They might even offer you to consolidate all debts into one, so it would be easier for you to keep track of the payments, or give you a longer payment period. Whatever the case, think it through before you decide and remember to choose the most suitable option.

Settle as much debt as you can by yourself.

This may look like an impossible task but actually it is easier than you think, since it is up to you alone. You can find a second job, something that will bring just enough money to pay off the debt, or part of it at least. Selling your stuff on the Internet or in a yard sale is also a good start. This is an ideal time to try out your creative side and monetize it, like making jewelry or painting. Or maybe you can help out your friend with his business if you are good with tools and know your way around some craft.

Talk to your family and friends.

Do not be ashamed to ask for a loan from your loved ones. However, before you ask them for help, make a plan for how you will repay them and tell them your strategy for reducing the debt. This will show them that you are approaching the problem responsibly and maturely, and it will also be helpful for you to have a repayment plan.

Seek professional help.

This is usually the last resort since most of these services will cost you some extra money, but this kind of help is actually very effective and useful. If you are not good with financial lingo, or bad with handling money altogether, this might be your best choice. These professionals will help you make a plan, negotiate with the creditors, calculate the best way to repay your debts and teach you how not to get into the same trouble again.

To sum it up

Let’s face it - it’s really hard not to be in debt. But it is much harder to get yourself out of it. It is kind of a vicious circle really, and you are standing right in the middle of it. Fret not! Clear your head from any thoughts of doom and do not give up hope. Try one or more of these tips, and see for yourself. And remember, before spending money on something - think it through and assess the situation. Do not rush into things, exercise patience and research your options. You would be amazed how much help 15 minutes in a search engine can be.

This was posted in Bdaily's Members' News section by Helen Bradford .