The bitter reality for many American people is a life of poverty. In the worst-case scenarios, many people find themselves unable to pay off their official financial liabilities. Such a situation can lead people into bankruptcy, which is something most people want to avoid at all costs.
Why it is better to avoid bankruptcy than to face it bravely.
Being a U.S. resident in Florida, I often hear a lot of people looking for some legal help regarding filing personal bankruptcy in Florida. No doubt, sometimes it becomes dire to do so, but it is never ideal. For, the U.S. laws force bankruptcy filers to:
1. Undergo compulsory credit counselling.
2. Take compulsory financial-management education.
3. Ensure ongoing payments to creditors.
Moreover, the filers also have to face the following consequences at a social level.
· Poorest credit ratings.
· The inability to borrow loans at the standard rates for up to ten years.
· Highest possible interest rates for any kind of loan.
So, the best thing to do is not to rely on bankruptcy as a crutch, but to make efforts in your routine life to keep yourself safe and away from filing bankrupts.
Let’s look at what you steps you can take to avoid bankruptcy. Some of these steps will require significant changes to your lifestyle, but it will be worth it.
1. Curtail your spending.
Spending money lavishly beyond your income is never wise. Without any check on your spending habits, you will likely incur tons of debt. So, bring about the first change to your lifestyle by cutting down your spending on unnecessary things like:
· Dining out with your family
· Visits to the spa
· Cigarettes and alcohol
· Gym membership fees
· High speed internet
These expenses and many more like them siphon away a major amount of your income. So, cutting them down at once will save you a lot of money to spend on the basic needs of life. Make a good monthly budget and keep a vigilant check on your spending habits.
2. Downsize your lifestyle.
The basic necessities of life like food, clothing, shelter, education, medication, transportation to and from your workplace, etc. are unavoidable needs. All other unnecessary luxuries must be shunned to downsize your lifestyle. These may include:
· Having a large house with a lot of extra space.
· Keeping an extra car or motorcycle at home for nothing.
· Enjoying the luxury of multiple exotic vacations.
· Using credit cards. You must pay only in cash just to keep yourself psychologically aware of your spending through watching the currency notes at the time of payment.
These and many other steps will go a long way towards controlling your extra expenses.
3. Try your best to maximize your income
Once you have cut down your extra expenses and controlled your spending habits, it is the time to try to maximize your income. You may do so by:
· Taking on a second job, or asking your spouse and other family members to do so if there are any.
· Selling whatever you do not require at the moment. For instance, extra shoes, outfits, handbags, furniture articles, vehicles, etc.
· Renting out your house or room at a reasonable rate.
4. Turn to your dear ones for help
Turning to those closest to you in your financial trouble is far better than consulting with the so-called professional experts who always tend to charge you undue fees. If some of your better-off relatives or family friends can support you in this situation, it will save you from going through bankruptcy. You may consider asking them for a long term debt without any interest and promise to pay them back as soon as you recover financially.
Conclusion In short, it is not going to be so easy and smooth to save yourself once you reach the verge of bankruptcy. As with many other things in life, prevention is key.