Tips to Avoid Bankruptcy

Covid has completely changed our lives. Many people are dealing with health struggles, along with financial troubles. Not everyone is able to work as much as they used to, and their bills are piling up. Because of this, many people turn to bankruptcy. However, that isn't your only option.

Here are some tips to avoid bankruptcy during this difficult time.

Know what you have coming in. It is important to know what money you have coming in, whether it is from your job or freelance gigs that you may have. You may also want to think about child or spousal support if you get that too. Every little bit will help, so take your time and figure out how much money you actually bring in every month.

If you aren't able to work, you should look into unemployment. That money will help you during these difficult times. You have put money into this account while you worked, so you should be able to use some of it when you really need it.

And compare it to what is going out. You also need to realize where you are spending your money. Your mortgage or rent isn't going to go away. However, you may be able to save money on going out to eat and for entertainment. You may also be able to cut back on your magazine subscriptions and other little things that you spend money on that you don't really need.

Remember that even a few dollars can make a difference. Even if you are only able to save fifty dollars a week (or even a month) can add up. You can put this toward paying off your debt, instead of going out to eat (or wasting money in other ways).

Talk to your creditors. If you are struggling to pay your bills, you should talk to your creditors. Since everyone is struggling to pay their bills, they are going to be a little more lenient when it comes to getting the money that they deserve. They may even give you a month off, in order to help you continue to pay your bills. Creditors would rather hear from you before it becomes a problem, than for you to wait until you are ready to declare bankruptcy to get some help.

You may want to look into credit counseling. There are many professional consumer credit counseling agencies, which can help. They will see what you are doing and help you figure out how you can do it better. They may be able to help you set a budget and work with your creditors to pay off or settle your debt.

If you want to avoid bankruptcy, you need to take a hard look at your finances. You need to know how much money you are bringing in and what you are spending. You may find out that you are wasting money on items that you don't even need! Dining out regularly can cost you more money than you ever imagined. Instead of spending fifty dollars a week on going out to eat, put it toward your debt. Even a small amount of money can make a difference.

It is also important to talk to your creditors, before you find yourself upside down. Don't wait until you can't pay to talk to them. They will be more likely to work with you, if you don't wait too late. If you are wondering if you should file for bankruptcy now, you need to talk to a lawyer that you can trust. Your lawyer may help you decide whether or not this is the best option for you.

Previously published on Medium and/or Newsbreak.