Bankruptcy can be a tool of survivors if there is
no other way left to solve your debt problems but before declaring bankruptcy
one should be fully aware of the consequences of it. For some people,
bankruptcy can provide a fresh start and a debt-free life, on the other hand,
declaring bankruptcy can put your business and assets in jeopardy. Also,
declaration of bankruptcy is a legal process that involves court hearings and
you need to appear in front of a judge. Bankruptcy court appoints a trustee to
access your financial condition so the court can have a better look at your
case .All this process of declaring the bankruptcy will also coast your some
fee. So it is clearly up to the debtor to declare bankruptcy or go for its
alternative which is to attain a debt relief plan .Restructuring the deb can
be the best alternative if you can not or do not want to declare bankruptcy to
save yourself from putting your assets and business on jeopardy. It highly
depends upon the condition of the debtor to choose the best option by getting
professional advice on such crucial topics. Here are 5 tips for saving yourself
from the risk of bankruptcy by preventing yourself from ending up into the
Delima between bankruptcy and debt restructuring
1)Have a solid plan to liquidate your debt.
Debt should be taken very seriously from the very
beginning when debtor requests a bank for secured or unsecured debt or if it is
just simple as getting a credit card service from a creditor. Every debtor
should have a solid plan in mind that how he is going to pay off his debt.
These can be various reasons for getting debt and that is just an easy part of
it. The real deal is to look out for ways to pay those payments.SO at the time
of taking debt, the debtor should precisely be able to look for the ways how he
would be able to manage this debt. Calculate your income and other income
sources to be able to see if those payments or affordable. Carefully select the
creditors that have relatively lower interest rates than others. Keep all small
details in mind to save yourself from bankruptcy trouble. Have a backup plan or
an emergency fund or some savings to get you going from a troubled finance
condition.
2)Decrease your expenses
You need to cut your unnecessary expenditures.
Once you realize you have a serious amount of debt over your shoulders you need
to be very careful and responsible with your money. Be more mindful before
spending your money on unnecessary things. You have to sacrifice your Saturday
nights and those branded clothes if you are into those things. Start saving
your money and make it your primary objective to be debt-free as soon as
possible. You also need to cut off unnecessary purchases. Your main focus is to
get out of debt as soon as possible or at least get it under control before it
overpowers you.
3)Negotiating with creditors
Once you realize that it is getting harder for
you to pay your loan payments then make your creditors aware of your situation
and try to negotiate with them. Try to make a deal with them by convincing them
for lower interest rates and more time to pay your debt. If they do not agree
with you then must inform them that you are planning to declare bankruptcy in
this case they are more likely to comply with you for renegotiating the debt
terms and interest rates. Once you declare the bankruptcy then the creditors
will no longer be able to ask for any debt payment from you this will lose them
their money and they would realize that it is much better to get some of their
money-back than not getting any money from you at all.
4)Prioritizing your debt
Make a list of all your debts and keep track of
them to have a clear sense of your financial situation condition. Make a
strategy to pay your debts by prioritizing your debt for your own convenience.
Don't just randomly make payments to you creditors whenever you can afford .If
yours are facing trouble paying all those payments then start to pay the debt
that has a higher interest rate or simply the one with a bigger amount. Once
you have cleared off of your debt it will provide you with a psychological
sense of accomplishing to overcome your debt-related problems. Chose what works
for you the objective here is to get out of debt as soon as possible for you.
5)Restructuring the debt
Once you realize that this situation is only
going to get worse and you are no longer able to pay your debt payments at all.
Do not waste more time as you can not able to solve this problem on your own.
Get professional help as soon as possible. Get advice from your attorney or
reach out to any restructuring company to restructure your debt by getting a
debt relief plan .Restructuring your debt by getting a drp debt relief plan will allow you to make lower payments with less interest rate over a longer the period which is much better than going bankrupt.
