Being stuck in debt is agonizing. Unfortunately, a way of life that encourages overspending or having abrupt emergencies can make you sink deep that getting out will be a major challenge. Whichever the reason, settling what you owe and paying all of your debt is hard. When this happens, it may seem like the easy way out is filing for bankruptcy.
What is Bankruptcy?
Bankruptcy is a process wherein an individual or business declares that they will be unable to pay their outstanding debts. It offers a path to finding financial relief, but of course, it comes with its own risks.
Filing for bankruptcy will not only destroy your credit score, but it would also leave you with unsecured debts, which is among the many other adverse effects it can have on your financial status. Consequently, it is wise that you explore your alternatives before filing.
Should You File for Bankruptcy Now?
While Chapter 7 and Chapter 13 bankruptcy — the two most popular bankruptcy options — are available, it is best to note that these options are not for everyone. Eligibility could also be an issue. To make sure, try to find ways on how you can resolve your financial woes, with bankruptcy as your last option. Here are some alternatives you might want to consider:
Get professional help
Dealing with debt is overwhelming. However, you do not have to deal with it alone. Debt management services will help manage your finances and explore the best options in clearing up your debt. Law Office of Davis & Jones, P.C. recommends seeking the services of a debt relief attorney in Salt Lake City to take you through the process and make negotiations for better payment terms. They will also represent you in case you get sued.
Dispose of items you no longer need
Look around for things that you do not need any more. Sell them to get quick cash and use that money to settle part of your obligations. Some items you can sell include clothes, toys (especially the collector’s items), electronics, furniture, books, and office supplies.
Get a part-time job
To clear up what you owe, it is necessary to diversify your streams of income. Getting another job is one way to boost your earnings. With that extra cash, you can pay some of your debts. Some jobs you can take (without sacrificing your full-time job) are copywriting, tutoring on weekends, or being a temporary staff at a restaurant or coffee shop.
Trim down your budget and stick to it
While trying to avoid bankruptcy, you should make an effort to cut down on your costs. It is pointless to live luxuriously while on the verge of bankruptcy. Avoid things like eating out, going on costly vacations, or subscribing to services that you rarely use. Do away with things you can survive without, as long as they do not impact your life negatively.
Once you realize that your finances are drowning, come up with a plan to tackle it as soon as possible. The above are some of the measures you can adopt.
