Alternatives To Bankruptcy: Consider Your Options Carefully

If you’re thinking about filing for bankruptcy, you don’t want to leave any stones unturned when you’re considering other possible options that might be more appropriate for your specific set of circumstances in getting your financial house in order. Check out every conceivable alternative means of getting your individual and/or business obligations on sound footing with a fine-tooth comb.

It’s only by making a systematic, methodical evaluation of your financial situation, will you be in a position to take the necessary steps that will go a long way towards keeping yourself and your family out of any financial hardships now or in the future, as well as avoiding the specter of bankruptcy.

The first and foremost issue you’ll need to address is educating your children – if you have any. Unfortunately, many of us weren’t blessed with the tools and knowledge during our earlier years to establish and maintain a good credit rating. You should be equally honest and straight-forward with your children concerning money management and finances.

However, you’ll also need to guide and direct them in making the right decisions regarding their financial future. Instill into them that hard work and perseverance will pay off eventually. While they may not understand this concept immediately, they’ll thank you for it in their later years because the fear of bankruptcy will never be a part of their lives.

You must establish a budget to keep bankruptcy from becoming a reality. It’s absolutely imperative that you know where your money goes at all times. Decide right now that if you don’t have the money to purchase something you want, you don’t deserve it. You need to determine your needs from your wants.

Whenever you’re contemplating a purchase, ask yourself do you really need it; or do you just want it? Many people get their needs confused with their wants, and this is a major reason why they experience financial hardships in their lives. You can’t spend money you don’t have. Because so many people have multiple credit cards, it’s easy for them to simply charge all their purchases instead of paying cash.

Forget about the notion of attempting to pay off one credit card using another credit card. This will back fire on you big time. It’s like trying to put out a fire by throwing gasoline on it. You must learn to live within a budget you’ve established for yourself, and not be taken in by all the various slick ads you may see on TV, and in newspapers and magazines telling you what you ought to buy, what you ought to wear, where you ought to live, what you ought to drive, etc.

Try to squirrel away at least three thousand dollars for emergency purposes, and learn to expect the unexpected. You never know what financial situation may arise suddenly and hit you on your blind side. Nothing drives one crazier than not having enough money on hand to get through a difficult situation. You might want to call this amount of money you’ve set aside for emergency purposes, petty cash. It’s just another step you can take to ward off a sudden financial crisis. If you have a checking account with your bank, monitor your checking account activities closely.

Don’t put yourself a situation where your checking account is ever overdrawn. Not only is it embarrassing, but it demonstrates poor money management skills on your part. Many banks offer overdraft protection for your convenience, so you should take up this matter with them.

There are numerous people who rely on the overdraft protection their bank offers, to keep them financed each month. However they soon realize their actions are destructive to both their credit scores and credit ratings. This mentality on the part of these individuals, is what usually “starts the ball rolling” on their downward spiral to declaring bankruptcy.