E-Debt Consolidation

Personal bankruptcy is a situation of insolvency, which means that the individual is restricted and cannot pay back debts. Once a state of bankruptcy has been declared, the person is relieved of debts incurred for various expenditures. However, this doesn’t mean that liquidation could be used as an excuse to get out of the responsibility of debt. In fact, to land yourself in a situation of personal bankruptcy is financial suicide. Therefore, before finalizing your decision to declare a state of financial ruin, educate yourself on the possibilities and consequences and evaluate carefully. It is because there are always ways through which you can avoid being bankrupt. It’s never too late!

Following are some of the most useful methods to avoid bankruptcy:

Write up a budget

Nearing a state of insolvency requires that a budget is immediately constructed and that too in physical form i.e. on paper or software. The method of writing a budget is irrelevant. What matters is that your finances are all laid out in front of you because once you figure out which amount is to be employed for what expenditure, it will make it difficult to lose money in the hustle-bustle of life.

Sell the ball and chain of your debt

Figure out which cost is pushing you towards bankruptcy and move on towards trying to cut down on the outlay. In other words, try to answer two questions: what do I owe and why do I owe it? Next, look around for junk assets that you can sell and acquire immediate money. It will help you cope up with the cash shortages.

Slice the swiping cards

Destroy your credit cards. Until and unless your financial situation gets settled, do not fall for these plastic devils. Refrain from keeping one even for emergencies. With nothing to save you from on-hand cash shortages, you are likely to be more careful with your funds.

Work hard, earn more

When you’re on the brink of insolvency, simply cutting down on expenses will not offer a complete solution. Therefore, pay attention to the income side of your budget as well. Figure out ways through which you can increase your earnings. You can take up a part-time job, ask for an advance on your monthly salary in return for more responsibility, and work overtime.

Say no to consolidation

Debt consolidation is a method of financing your obligations by taking out a loan and using it to pay outstanding amounts. As good as it sounds, it’s a trap! Consolidation pushes you further towards bankruptcy, so do not fall for the beautiful picture that consolidation companies paint to lure you in. Sure, your immediate cash worries will be over, but you will still have to pay back the loan you took out which means your debt will not be eliminated – it will just be extended over a longer period!

Hold on to reality

Falling close to an insolvent state can prove to be an emotionally exhausting time as well. However, you must keep a good grasp on reality and refrain from making erratic decisions. Seek the advice of friends and family before a financial move. And do not panic or lose hope!