A Bankruptcy Lawyer’s Blog

Avoiding Bankruptcy and Saving Cash

The difference between avoiding bankruptcy and being struck down by it will often come down to how hard you try to get a hold of your finances. In many cases, bankruptcy occurs when serious debt spirals out of control leaving a consumer with no choice but to go bankrupt. The key is taking control before things go too far.

A good way to judge how significant your risk of bankruptcy is, is to work out how much money you have coming in each month against the amount you spend on bills. If your monthly outgoings are significantly higher than your income, you have a problem. If things stay the same and you don’t take action, then you’ll get further into debt and become more at risk of bankruptcy.

Short term fixes are never the solution to long term financial problems, but anything you can do to bide yourself some time is worthwhile. Phone up your creditors and see if they can freeze repayments for a few months or so. It benefits them to do so if it prevents you going bankrupt because they’re more likely to recoup the money you owe them. This won’t solve your problems because your debt remains, but it does give you some time to steady the ship and take stock of your situation.

You need to maintain a pro-active attitude if you want to turn your finances around. Work out every possible way you can for reducing the amount of money you have going out each month. Start with your household bills and expenses. See if you can get cheaper rates on gas, electricity and water. Get rid of things you might not need that cost you money each month and identify other areas you can make cutbacks. Each of these things can add up to save you massive amounts of money each month.

Avoiding bankruptcy is about reducing debt from insurmountable to serious. Serious debt can be managed and eventually eliminated but insurmountable debt is where you have no hope of turning things around. What cripples most people and makes their debt insurmountable is interest. If you can reduce your monthly interest and stop your debts from growing, then you have a significantly better chance. All credit cards and loans need to be moved to deals where you pay little or no interest. Get creative and move your money around to better deals wherever possible. Going into your bank and getting some advice on doing this is a decent idea. They might well have the perfect solution. You can also look online and use price comparison sites to get better deals. Remember, it’s about being pro-active and taking control.

If you’re reading this then you’ve already taken a decisive step and decided to take action. Congratulations, you’re already much more likely to avoid bankruptcy. Now use this initiative to get cracking on your money and interest saving techniques.

There’s more information and useful advice on avoiding bankruptcy at the Debt Help Site.