Declaring bankruptcy has serious consequences like increased difficulty in obtaining loans, apartments, automobiles, credit cards, etc. And even if you obtain these, you might be required to pay increased interest rates for the same. Most of you, who are contemplating on filing bankruptcy, are required to have a good idea on the same. If you are single, this would be very well your own decision, but if you are married, then this would be a family affair.
Check for all the debts and outstanding you owe
If you find the debt amount exceeds your earnings, then you have only two options to go for. Either you drastically cut down your lifestyle by selling off your bigger house and getting a smaller one, get a second job, part-time one, etc. or file for bankruptcy. But never be in the notion that filing for bankruptcy would not bring any changes to your lifestyle. It would obviously do, and would also bring drastic effects on your credit rating for the next ten years.
Any layman can easily tell that the first option is the best one rather than declaring bankruptcy. For this you need to chalk out a plan, on how you can embark upon frugal living by living on your earnings, and if possible by increasing your monthly payments towards loans.
The steps in declaring bankruptcy to help you out in these efforts namely;
Chop, slice, burn and sell
To start off, try with the small soft cuts like using the substitute products instead of going for its costly counterparts.They would be more than willing to relent to it. This is because in cases when your account goes to the collection agencies after default, banks rarely get paid in full, leave alone cases of bankruptcy!
If in case your accounts have already been handed over to some collection agency, use the same knack to deal with them and try in a very polite manner on negotiating for lower interest rates or lowered sums. But whatsoever measures you follow, try to get the newly amended one in writings. Take the oath never to fall back on it. Once you are done with the debt payments, promise to yourself that you would never trudge on the same path of incorrect money management policies.
Try to maintain solid personal finances, as this is the key to a happy life, free of any financial problems. Keep the word ‘over spending ‘away from your dictionary of living and embark upon the frugal and economical living. This would never let you swallow the bitter pill of debts again! Ensure that if you do end up filing bankruptcy, due to mismanagement of money, find out ways to come out of it. Click on declaring bankruptcy in foreclosure and learn more.