If you’re currently in a position where you feel like declaring yourself bankrupt is the best step you can take, it’s worth taking a moment to stop, breathe, and to ask yourself whether you’re doing the right thing.
While there are plenty of benefits to declaring yourself bankrupt, there are also many risks involved which can affect you for many years to come, so it’s worth taking your time to make sure you’re doing the right thing.
In fact, before taking this crucial step, it’s worth noting there are five things you should try doing before going bankrupt. By following these five things, you’re opening yourself up to the possibility of getting yourself back on track and where you want to be financially.
Let’s get straight into it.
1. Check Your Options
When it comes to clearing and staying on top of your debt, you need to remember there are so many viable options and approaches you can try to help you stay organized and on top of things. You need to explore these options and remember that bankruptcy should be a last resort.
You can try things like debt consolidation, changing providers, taking out a better loan which is more affordable to the loan or credit rates you’re paying now. It can be worth getting a dedicated bankruptcy lawyer to help guide you through the process and your available options.
2. Get Another Job
While you may feel like you have no time already, getting yourself a part-time job or another evening job can be a great way to boost your income to help you get back on top of things like paying off debt.
You only need to do something else a few hours a week, or maybe even starting your own business. If you work hard for several months or a year, you can gain more money, pay off your debts, and avoid declaring bankruptcy.
3. Be Forceful with Creditors
The chances are you’re thinking about declaring bankruptcy because you’re in debt, but most creditors, like credit providers and banks would much rather get a little bit of money out of you while owing them, rather than trying to get money out of someone who’s bankrupt, which doesn’t work well for them.
With this in mind, send letters to every establishment you owe money too and firmly say you’re considering bankruptcy and you want to sort something out.
4. Understand the Consequences
When you file for bankruptcy, there are several things that will happen. This will depend on your personal situation, so it’s important to make sure you’re taking the time to research how bankruptcy is going to affect you.
It will affect things like your credit rating, and your permanent financial record, so ensure you’re taking the time to see whether this is actually the best option or you, or whether it’s best to power through.
5. Get Rid of Non-Essential Anything
It’s essential to make sure you’re going through the process of removing and selling anything you don’t need. If you have an expensive car, a computer, an excellent television, and the latest smartphone, you’re far away from declaring bankruptcy.
Bankruptcy can affect you for a long time in a negative way, so it’s essential to make sure you’re getting rid and making money on the things you’ve got to seek financial freedom.
While bankruptcy should always be used as a last resort, that doesn’t mean you shouldn’t think about using it. However, you need to make sure you’re aware of the other things you should do first to get the best outcome for yourself now and in the future.