TIPS IN AVOIDING BANKRUPTCY AND EXCESSIVE DEBT

In order to avoid any excessive debt and to be proactive in battling bankruptcy, here are a few tips to help keep you on budget.

Only buy things when you can pay for them in cash. If you are constantly using your credit cards and lines of credit to make everyday purchases, you can quickly find yourself with more liabilities than assets, which will hurt your credit rating and can lead to more serious debt problems.

Keep track of your purchases. By using a monthly income and expense sheet, you can monitor your spending and weigh it against your income to see patterns in your spending habits. Use this monitoring to help you make wise purchases.

Don’t spend more than you make. If you are spending more than you make it means one of two things. Either you are buying with credit, or you are using your savings. Spending more than you make is a fast way of getting into financial trouble and can lead to bankruptcy issues.

Pay your bills first. As soon as you get a paycheque, pay off the outstanding bills before spending money on anything else. If you buy miscellaneous things before you pay your bills, you may not have enough to cover the bills when you go to pay them. This can hurt your credit rating and lead to further financial issues in the future.

Call your service companies and ask for an updated plan. Sometimes outdated plans are much more expensive. Service companies such as cell phones, cable and internet, frequently update their plans and reduce the costs but do not notify you of these changes that may benefit you financially.

Sell off some assets you don’t need. Selling recreational homes, extra vehicles, jewelry or home furnishings would reduce the amount you owe and help to reduce your expenses that are directly attributable to the asset sold.

Contact credit card companies to reduce interest rates. Sometimes just a simple phone call to your credit card company will reduce the interest rate charged on your cards. Be sure to ask if there is any fee to reduce the rates.

Consolidate your debts. Many financial institutions offer debt consolidation loans. This is a single loan that is large enough to pay off most, if not all of your creditors, leaving you with a single outstanding loan. The interest rate on the loan would be less than credit card interest. Servicing one loan, as opposed to many loans is more convenient and easier to keep track of.

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