Bankruptcy filing can certainly wipe out your debts to give you a debt free life. But the effects of post bankruptcy filing can be farfetched as you can incur negative effects on your credit report for many years. If you are unable to make even the minimum monthly payments to your creditors bankruptcy can be an option. Considering chapter 7 bankruptcy laws or chapter 13 bankruptcy filing can give a fresh start to your finances. However it is always advisable that consider bankruptcy as your last resort. It will save your credit report from negative marking and enable you for future transaction.
Here are some quick tips you can consider if you want to eliminate debts without bankruptcy filing:
Put an end to your spending spree:
Most people get into debts due to their excessive spending habits. You should always spend according to your means. If you spend recklessly like buying things you do not need the end result can be that you will knee deep in debts. This situation can be avoided if you keep track of your expenses and spend wisely. Making a monthly budget can be of great help as you can have a basic estimation of your income and expenditure. You can also eliminate all non-essential spending to regain control of your finances. Instead of waiting for the moment when things get out of control, it is better that you put a check when you sense danger.
Increase your income sources:
You can manage your finances in a different way altogether. If you cannot put a check on your expenses, balance it by increasing your income. You can take up part time jobs or work from home that will get you some extra money to clear your debts. You can continue this process till your debts are paid off. This will help you to avoid bankruptcy easily without disrupting your lifestyle.
Curtail your other expenses:
If your lifestyle costs you a lot of money it can be difficult to afford. Especially when you are under debts these additional expenses can be too taxing. Evaluate your bills to find out where you are paying more. If you have costly living expenses shift to something which is cheaper and affordable. You can also rent your place to meet your expenses. Reduce your phone bills or the number of magazines you subscribe.
Consolidate your bills:
Debt consolidation loan can be a great way to pay off your debt without hampering your credit card report. If you have home equity you can clear all your bills with the consolidation loan. By consolidating your bills you can reduce the interest rates on your bills. This will help you to pay off your debts faster.
Clear one bill at a time:
Your finances may not permit you to opt for debt consolidation. In such circumstances the best option would be to pay off one debt at a time. Keep aside your basic expenses and use the rest to pay off the bill with the lowest balance. After that is cleared off pay the one that has the second lowest balance. This way the number of bills that you owe reduces. At the end you are just left with a single bill that you can pay off with a well balanced financial program.
This is a guest post by Kevin Craig who is a financial writer for Oak View Law Group. He has helped lot of debt burdened people with free counseling on debt settlement services. With his advice many are now living a debt free life.
