Why should you avoid bankruptcy when it is said to be such an easy solution to get rid of your financial crisis?
Sadly, a large number of Americans choose to go for this so-called easy solution. However, if you are contemplating filing for bankruptcy then you should really be sure to do your homework, and you may change your mind.
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"Rather go to bed supperless than rise in debt."
- Benjamin Franklin |
There are many solid reasons for working hard in order to avoid bankruptcy. Once you file for bankruptcy it continues to stay on your credit report for ten long years. Lenders will consider you a person with a greater amount of risk. Even if they lend you any money it will carry a higher rate of interest.
Bankruptcy Has Long Lasting Repercussions
This is why instead of declaring a bankruptcy you should start taking necessary steps to avoid bankruptcy. Although in the beginning it might look like an appealing option, or a quick fix to your debt situation, the repercussions of filing for bankruptcy are long lasting and difficult.
The guilt and shame associated with the entire process is many times quite difficult for the debtor to handle. The stigma alone adds to the financial stress you’ve been dealing with for years.
Once you file bankruptcy, you are no longer able to seek credit at reasonable rates for a period of 7 – 10 years. This actually may not be such a bad things, since debt is what got you in trouble in the first place. At this point, it’s much better to swear off taking on any sort of debt ever again.
Employers Don't Consider You A Reliable Person
Most employers are not inclined to hire an individual who he knows as having a bad credit history. It becomes even more of an issue if you are looking for a job in the financial industry.
This is a strong reason why you should avoid bankruptcy. Moreover, bankruptcy does not make you free from all types of debts. You may get relief from certain kinds of loans but student loan, child support payments and taxes are some examples of loans that you still have to pay.
What To Do?
Now, the big question is what steps you should take so you can avoid bankruptcy.
The very first thing you should do is to make a list of your expenses. Sort out those expenses that are not really necessary. Most people get into this kind of situation because of their bad spending habits.
If you really wish to enjoy financial freedom, you have to learn how to resist the temptation of buying something when you can’t pay cash for it. Delayed gratification is a discipline that identifies someone with maturity, a real honest-to-goodness adult. Yes, it’s time to grow up.
Additional Income
If are you on the brink of declaring bankruptcy, merely curtailing your spending will not necessarily be enough to keep your head above water.
You also have to find ways of earning additional income. There are many ways in which you can do this.
Surprisingly to most people, making more money is not that difficult. Although it may not be “easy”, increasing your income is very doable.
Work longer hours, ask for overtime, seek out a higher paying position, do anything to legally and ethically sound to increase the inflow of money.
Try to find out other alternatives also. Remember, we are working to avoid bankruptcy here, right? For example, start a new home based business. Deliver pizzas at night, deliver newspapers in the morning – GET ENERGIZED BY THE CHALLENGE. YOU CAN DO IT.
"Debt is like any other trap, easy enough to get into,
but hard enough to get out of."
- Henry Wheeler Shaw |
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Debt is NOT your friend. It's not a wonderful "tool" for building wealth. That's a myth.
