Bankruptcies hit their peak in 2005. In that year, one out of every 55 households in America filed for bankruptcy.
Things have improved since 2005, but there are still many people who file for bankruptcy each year.
Declaring bankruptcy is best avoided if at all possible. It can lead to you losing your assets, have a serious impact on your credit score, and could even harm your chances of employment.
Read on to learn how to avoid bankruptcy and turn your finances around.
In This Post:
Sell Some Assets
The most important things are being able to keep a roof over your head and food on the table.
The vast majority of the things you own aren't that important in the bigger picture. Items you've collected over the years such as DVDs, electronics, TVs, books, clothes, furniture, and more can all be turned into ready cash if you're willing to let them go.
Can you live without your car? It may be inconvenient, but if taking the bus for a few months means you don't have to file for bankruptcy, it will be worth it. Sell whatever you don't need and you may be able to turn your finances around.
The less you spend, the more of your income you will have left over for clearing your debts before they get out of hand.
Take a look at everything that you spend each month, and work out those things that are nice-to-have rather than must-have. You should find that there are a lot of things you can cut out such as streaming subscriptions, eating out, expensive phone contracts, and more. Cut your budget down to the bare bones if you want to avoid bankruptcy.
You may also be able to save some money on your debt repayments by consolidating your debts into a single loan. How does debt consolidation work to help you to avoid bankruptcy? It allows you to reduce your monthly repayments as well as the interest you are paying on your debts.
Maximize Your Income
If you've sold your assets, cut down on your spending, and you're still at risk of bankruptcy, then you're going to need to earn some more money.
That could mean working more hours, asking for a raise, or finding another side hustle to bring in some extra cash. Whatever it takes to get the extra money you need to avoid bankruptcy.
There are plenty of opportunities make money online or working out of your own home. Take a look at some of the other articles on our site for some inspiration.
How to Avoid Bankruptcy by Money Saving
Hopefully, these tips on how to avoid bankruptcy have helped.
If you're looking to save money to help get out of debt, then you're in the right place. We have a wide range of articles on clever ways to save money, as well as ways that you can earn a little more.
Check out the rest of the site, and we hope that you can find something that can be of help.