9 Tips to Help You Avoid Bankruptcy

Couple budgeting to avoid bankruptcy.

If the bills are piling up and you don’t see any realistic way that you can pay them, you might be thinking about filing for bankruptcy. A Georgia bankruptcy attorney can help you evaluate your options and explain the process to you. Below are nine of our tips to help you avoid bankruptcy.

Avoid Bankruptcy with These Nine Tips

1. Talk to Your Creditors

Contact your creditors to see if you can work out a repayment plan that you can afford. Most companies would rather lower your interest rate or monthly payment than have to go through the bankruptcy court to get paid pennies on the dollar. Also, you might want to steer away from debt settlement companies. They charge high fees to do what you can do for yourself by contacting your creditors.

2. Seek Out Credit Counseling

Get credit counseling from a reputable consumer credit agency. Many companies make promises but only take your money and leave you in a worse situation than before. Check with the Better Business Bureau before signing on with a credit counselor. 

3. Decrease Your Expenses

Decrease your living expenses to avoid bankruptcy. Cut luxuries and unnecessary items, like the landline, cable TV, a generous cell phone service package, and an expensive coffee shop habit. Figure out what happened to get you into your current predicament. Design a plan to prevent this problem from happening again in the future.

4. Find Ways to Increase Your Income

Increase your income with a side gig or work overtime at your current job. Use the extra money to pay down your debts. 

5. Look into Selling Your Things

Got too much stuff? Sell some of your things, like electronics, jewelry, collectibles, and other items with healthy resale value. Use whichever means is within your comfort zone, whether that is with selling apps and websites or a yard sale. Pay off as much debt as possible with the sales proceeds.

6. Get Health Insurance

A medical crisis can generate astronomical healthcare bills. Many people file for bankruptcy because of medical bills they cannot afford to pay. Even a bare-bones policy can help you avoid this situation going forward.

7. Create a Budget

Create a budget so that you can live within your means in a sustainable manner, while saving for retirement and a rainy day. Include a category for the miscellaneous items that come up from time to time throughout the year. Type up this budget and save it on the desktop of your computer or tablet. Open the document first thing every morning to keep yourself on track. There are many budget apps and tools available for little or no cost. 

8. Expect the Unexpected

Many people file for bankruptcy because they get hit with an unexpected bill and have no savings. Set up weekly automatic transfers from your checking account to your savings to start building a nest egg today. Three dollars a day will add up to over $1000 in just one year. 

9. Improve Your Credit Score

If you have a poor, fair, or good credit score, you will have to pay a higher interest rate on your car, credit cards, and personal loans than someone with a very good or exceptional credit score. The additional interest increases your living expenses every month. Pull your credit report from all three of the primary credit reporting bureaus. You have a right to one free credit report every year from each bureau. Correct errors to raise your score. Living within your budget and paying your bills on time will also increase your score over time. Negative information will drop off of your report eventually. 

Think Bankruptcy is a Possibility? Contact Our Experienced Bankruptcy Attorney

If you’re considering a bankruptcy filing, schedule a consult with an experienced Georgia bankruptcy attorney today for a free consultation.

Posted in: Bankruptcy