However, for some of us, over time our credit purchases can begin to accrue at a rate that exceeds our ability to pay them off. It is fundamentally a cash flow issue, as our cash inflows are significantly slower than our cash outflows.
If you are currently in such a """"cash crunch"""" and have accumulated tens of thousands of dollars in unsecured debt, you may have already considered bankruptcy as a means out of your financial bind. Obviously, everyone is aware that declaring bankruptcy can be devastating to one's credit score and make it nearly impossible to obtain loans. It is prudent to do everything possible to avoid bankruptcy at all costs.
Here are ten bankruptcy avoidance tips:
1. selling assets and using the proceeds to reduce debts:
Many of the items in your home may be worth less to you in their current state than if you were to convert them into cash by selling them. Pay off the debt with the highest interest rate first.
2. Eliminate luxuries such as cable television from your monthly budget:
Examine a list of your current monthly expenses in detail. Remove from your existence everything that is not essential right now. You can always sign up for cable once this situation has passed.
Ask your creditors for assistance in lowering your monthly debt obligations:
Contact your creditors, particularly your credit card companies, and inquire as to whether they would be willing to reduce your monthly payments. Inquire about any hardship programs they may provide.
4. Seek assistance from a consumer credit counselor:
Professional consumer credit counselors are in the industry of assisting individuals facing possible insolvency. Many of these services are available for a nominal fee, while others are free.
Consider borrowing from family and close acquaintances.
Generally speaking, you should usually avoid borrowing from family and friends. Nonetheless, this is a particularly difficult period in your existence. You may need to summon the courage to seek for financial assistance to get through this.
6. Try debt settlement:
This is the phase in which you negotiate with your creditors to reduce your debt by 40 to 60 percent of your outstanding balance. Again, these corporations would prefer to receive something rather than nothing: if you """"go BK,"""" they will receive no additional money from you.
Work to improve your credit rating:
Examine your credit report for errors and incorrectly reported information. Report any such objects you discover. This is an excellent method to increase your credit score quickly.
Maintain a positive relationship with your bank:
In the eyes of creditors, any evidence that you are financially responsible should be a feather in your headwear. Maintain a checking account in good standing as one measure. If your bank has closed your account, consider applying for one with a bank that offers second chances.
Avoid making purchases with credit cards:
Eliminate credit card purchases entirely. Convert to currency. This is the initial step in reducing that frightening credit card debt.
Pay down your debts with any extra money you are able to earn:
If you find a means to earn extra money, such as by taking on a second job, put every cent toward paying off your debt.
Implement these ten suggestions while doing everything possible to avoid bankruptcy.""
" - https://www.affordablecebu.com/
