In your life, there may come a time when your finances get out of control. Whether you’ve let your spending become too inflated or you’ve taken on some unexpected debt from medical bills or something else, you may get to the point where you think your only option is to declare bankruptcy. And while this might be the right choice for you, this is never your only option. So to help you bring yourself back from the brink of bankruptcy, here are three ways you can save yourself when you’re on the verge of declaring bankruptcy.
Commit To A Strict Budget
To turn your financial situation around, you’re likely going to have to change the way you’ve been handling your money. To help with this, Rachel Cruze, a contributor to Dave Ramsey, recommends that you create a zero-based budget. This means that you take all the money you’re making each month and budget every last penny. First, make sure you cover all your fixed costs. Then, take an average of what you’ve spent for the last few months on things like seasonal expenses or food. Whatever’s left over, which is hopefully a decent amount, put that toward paying off your debts. This should help you get your finances back under control quickly.
Get In Touch With Your Creditors
Before you give up on your ability to pay off your debts, it’s a good idea to get in touch with your creditors and see if there’s anything else that can be done with your accounts. According to Bridget Hillyer, a contributor to QuickenLoans.com, many creditors are willing to settle for a smaller amount if it means they’ll be able to get at least some of their money back from you. They may also be willing to negotiate your interest rate or help you get on a repayment plan. Make sure you’ve exhausted all these options before you move forward with a bankruptcy.
Try Credit Counseling
According to Latoya Irby, there are bankruptcy laws that may require you to go through credit or financial counseling before you’re able to file bankruptcy. Even without this law, getting credit counseling can really help you get a handle on your finances. They can help you with managing your debt and working with your creditors to get you back on solid footing. While the plan you may have to adopt might seem extreme, it can be the difference between having to file for bankruptcy and being able to control your finances on your own.
If you’re on the precipice of bankruptcy, consider using the tips mentioned above to help you learn how you can regain control over your debt and pull yourself back from the edge of potential financial ruin.