How to Avoid Filing for Bankruptcy
Bankruptcy has a negative connotation to it. It always represents financial difficulty and little leverage to fix it. That may be true, but bankruptcy doesn’t have to be always negative. In fact, the website of the Bradford Law Offices, PLLC, has enumerated the different bankruptcy processes and their advantages.
However, it can be understandable if certain individuals don’t want to file for bankruptcy. Below are some alternatives they can pursue.
Negotiating with creditors
If you can’t properly pay your debts and liabilities, sometimes the best thing you can do is to talk to your creditors. You can negotiate for a better payment plan, like a reduced payment plan in exchange of a longer payment schedule or something similar that can give you more financial flexibility.
If the negotiating doesn’t get approved or if it is not enough to give you a financial cushion, you can always do the most basic thing people with money problems do – borrow money from their family and friends.
But make sure that the borrowing will actually solve or significantly help your financial situation and not just serve as a band aid solution that can turn into an additional financial burden in the future. Also, make a plan on how you are going to pay your family or friend back.
You can also consider selling your assets, such as houses, vehicles, luxury items like jewelry, and other things that are just on standby or you can live without. Sometimes, selling your stuff is the most efficient way to pay your debt, because they are usually fast lump cash that may solve financial difficulties.
Like borrowing money, make sure that selling these assets will actually solve or significantly help you. You don’t want to lose stuff for nothing.
Even if the other alternatives succeed, you can have more financial flexibility if you make some changes in how you spend, particularly on things that you can live without, such as eating in expensive restaurants, watching movies and sporting events, and indulging in shopping.
But you should not sacrifice your health just to save money. Look only for aspects in your life where you can make warranted adjustments.