Bankruptcy is, unfortunately, a sad reality for many people who have had a turbulent relationship to their finances or have undergone a business dealing that hasn’t become lucrative. Loss of finances can occur in so many ways that it’s impossible to list them in one article. As long as money has been around, there have been ways to separate you from it, and people looking to do so. If you have been unfortunate enough to experience this, there are steps you can take to prevent becoming bankrupt.
Sometimes, bankruptcy is actually the best option, especially when saddled with debts that you have no ability to pay back anytime soon. The best bankruptcy attorneys can help you navigate these paths with relative ease, and can educate you in a detailed yet concise way about the best methods of proceeding from here on out.
However, bankruptcy can completely ruin your credit chances and will mar your financial standing for the rest of your life – so it’s important to try and prevent it first and foremost. Here’s how:
Sometimes, you have to bite the bullet and sell as many assets as you possible can to overcome the difficulty of being saddled with debts. If you have business equipment, property, even cars that have some significant capital potential attached to them, sell as much as you can and use that money in areas that most require it. Doing so can help you tremendously in giving you that extra financial boost to overcome difficulty.
If you’ve been running a business, you might have plenty of stocked products lying around. Consider selling them at a much-reduced price to shift as many units as possible, and sell the raw materials to interested parties. While this comes with a large emotional price, as it’s never easy to see anything you’ve built slowly reduce in size and quantity, this is by far the best method for getting out of this situation cleanly.
Come To Terms With Creditors
Creditors are often not as bad as they’re made out to be. Some will often take legal proceedings straight away, but many will actually prefer to be given a regular payment so they can budget for their losses. If you fail to make good on these payments, they are likely to take action with a debt recovery agency, and so it’s important for you to allocate affordability and understand exactly how frequent and how large these payments can be. You might also be afforded the option to ‘settle a debt,’ which for a reduced sum allows you to clear your balance provided you do it immediately. This will show up on your credit report as a settlement rather than a complete repayment and will stay that way, but it can be better than no solution at all.
Family & Friends
If you have to, appeal to your family and friends to help you out of this situation. Someone might just have the funds necessary to help you out of this tight spot, and if you’re really hurting, it’s worth a try. Provide terms and a realistic picture of how you could pay them back over time. This method will allow you to sort out your problems immediately, and instead worry about paying back someone close to you who is less likely to send bailiffs or put you into bankruptcy. Just be forewarned that you also enter in an emotional pact with the person involved, and so any further inability to pay this debt could result in some traumatic experiences for both you and the relative or friend in question.