Learn How to Avoid Bankruptcy While Paying Off Debt the Affordable Way

Bankruptcy seems like an easy fix for mounting bills, constant calls and credit cards that are bursting at the seams. But as simple as it sounds, bankruptcy is a drastic measure that should only be taken into consideration when all of your other options are exhausted.

In the meantime, here are several other options to help you avoid bankruptcy while still working to pay off your debt - no matter how much you currently earn, or what you owe.

1. Eliminate or Cut Back on Spending - You may think you've budgeted as best you can, but there are still several areas where you can eliminate, or at least cut back, on unneeded items until you've paid down your debt.

For example, cable TV, an expensive cell phone plan and subscriptions or memberships you no longer use are all prime candidates for elimination.

2. Work with Your Creditors - It's hard to imagine that your creditors are really just average people trying to make a living too. But when they come calling (or knocking!), instead of trying to come up with excuses or explanations as to why the bills haven't been paid, explain your situation to your creditors and see if you can work together to come up with a plan.

Remember, the companies you owe money to would rather see something - anything - from you rather than nothing at all. Some companies even have special programs aimed at reducing your monthly payment or interest rate. Taking the time to work out a payment plan that you can both live with will help make those sleepless nights a little easier!

3. Consider Credit Counseling. A law passed in 2005 requires you to actively consider credit counseling before filing for bankruptcy. Even if you think the monthly payments set up by the consumer credit counseling office are unmanageable, you may be able to find excess spending in your budget where you least expect it (like buying food that ends up going to waste or buying that "must have" pair of shoes that are sitting in your closet with the tags still on them).

Even taking a small step such as doing a realistic monthly budget of where your paycheck goes can go a long way in helping you spot "leaks" in your debt management plan. You may be surprised at what you learn!

4. Sell What You've Got - It may hurt to get rid of the "fun stuff" but considering that filing for bankruptcy is no fun at all - it's a realization that you have to consider. Consider selling off any recreational vehicles - such as a boat or RV, or downsizing your car or home.

Declaring bankruptcy could cause you to forcibly lose the things that are nearest and dearest to you, so the more items you can part with to make some money back - the better off you'll be in the end.

These are just a few of the steps you can take to avoid bankruptcy. Remember that bankruptcy can haunt your credit report for years to come. The steps you take now can help you secure your financial future.

The More You Know,

Judy O'