Bankruptcy is difficult and stressful. The after effects can leave you with a low credit rating, meaning it will take years to recover and start making use of credit lines and mortgages again. Before you proceed with bankruptcy, try these tactics to get your financial life in order.
Settle or Negotiate Debts
Talk to creditors and see if they are willing to settle your debts for a fraction of the cost. This works like debt consolidation, but saves you money. If possible, get a debt consolidation loan to combine all your debts into a single manageable payment, so you can handle it budget wise.
Sell Your Assets
Your assets and valuables could be at risk in a bankruptcy claim anyway, so consider selling some things to help dig your way out of debt. Do you have a second vehicle you can part with? Do you have other valuables? Meet with an appraiser for high value items. Sell other items online or at a local flea market.
Borrow Money from Family
Though it means swallowing your pride to do it, if it will save you from filing bankruptcy, don’t be afraid to ask for help when you need it. If it means keeping your home, it is worth risking the strain on the relationship.
Sit down and look at your budget. See what you’re actually spending compared to what the budget says you are. Make cuts where you can, even if it means you have to make more meals at home, or get a friend to cut your hair for you. Shop secondhand stores for clothes and shoes. Rent movies instead of seeing them in the theater. These sacrifices are short term and the savings can go a long way toward repaying your debt.