Saturday, October 16 , 2021

Best Ways to Avoid Bankruptcy According to Resolvly

 

Bankruptcy should be considered the absolute last resort. It is always best to make sure you’ve exhausted every option first. At Resolvly, we help consumers avoid bankruptcy every day through debt resolution. This guide examines how to avoid going into bankruptcy and gain freedom from debt.

How to Avoid Bankruptcy

For many people who are struggling, bankruptcy can seem like the only option available to getting rid of debt. However, bankruptcy is not a cure-all, and it can have long-lasting repercussions on your credit score – not to mention your life and financial abilities.

Don’t spend a decade being followed by the ghost of your debt as you attempt to rebuild your credit score. This list details how you can find more money to pay your debts and avoid bankruptcy.

  1. Sell, Sell, Sell

This isn’t a fun option – but bankruptcy is often worse. Selling your assets is a great way to quickly rack up some funds and pay off your debts. You can sell everything from your car to the books collecting dust on the bookshelf. You can also sell furniture and work with cheaper second-hand replacements.

  1. Make an Unyielding Budget

Drastically cutting down on spending can help you pay down your debts quickly. This is the time to spend money only on food, shelter, medicine, and transportation to and from work. You’ll need to cut out the luxuries and find alternatives where possible. Cut the gym membership and dig into at-home, body-weight exercises. Stop entertainment subscriptions and instead check out full-length shows on YouTube for free. No nail salons, no dining out, no alcohol.

Again, this is temporary. As much as it can be painful in the moment to cut these things, avoiding bankruptcy is worth the momentary sacrifice.

  1. Consider Debt Consolidation

Debt consolidation essentially takes all your different debts and puts them in one place. You will still owe the same amount of money, but the goal is to work toward paying it off at a lower interest rate in monthly installments. Many people find debt consolidation helpful because it cuts through the confusion of different bills and credit cards so you can focus on whittling away at a single amount.

  1. Talk to Your Creditors

When it comes down to it: your creditors want your money. They don’t want you to file bankruptcy and not pay. If you’re upfront with them about your financial situation and explain that you are willing to pay your debt if at all possible, you might be able to achieve a lower monthly rate and/or a lower interest rate.

  1. Debt Counseling and Debt Management

Meet with a debt counselor to help you form a plan to pay back your debts with your unique situation in mind. They will help you form a budget and enroll you in a debt management plan that often features a lower interest rate.

This step is required in most states before filing bankruptcy. Use this opportunity to see if there is a way out of bankruptcy.

  1. Look for Extra Income

Taking on overtime, an extra job, or finding a side hustle can bring in some much-needed cash. There are lists online of hundreds of side-hustle jobs like Uber, DoorDash, and even things you can do from home. Additionally, taking on odd jobs (lawn mowing, car detailing, etc.) or using a hobby to earn money can help you significantly lower your debt.

A Way Out: Debt Resolution

If your debt has taken over your life, bankruptcy does not have to be the answer. Even if it seems that your debt is unmanageable, there is another option: Debt resolution. Consider working with Resolvly, where it’s our mission to help people get out of the debt-trap. We can refer you to a consumer law firm that will fight to dismiss your debt and help you gain your financial freedom again.

Resolvly is a Florida Bar-approved lawyer referral service that helps clients nationwide connect with consumer protection attorneys that specialize in debt resolution. The Boca Raton-based company was founded in 2015 and has helped thousands of Americans find the right legal-based solution to reduce or dismiss their unsecured debt. Resolvly works with a network of attorneys that will protect and enforce their clients’ legal rights.

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