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Battle plan to beat bankruptcy

Battle plan to beat bankruptcy

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When you are facing rising debts, the prospect of wiping the slate clean by opting for bankruptcy can begin to seem like an attractive option. But going bankrupt is a serious business that can affect your credit rating for a long time, not to mention your self-esteem. Before you stride blindly out on the road to apparently debt-free oblivion, try taking the following steps. With careful planning and a lot of willpower it may just be possible to get your finances back on track without taking such a drastic step.

Get a Grip on your Finances

Scary as it may seem, you need to have a complete picture of your financial situation before you can devise a successful battle plan. Pull together documentation on all your expenses and lay them out in terms of secured debt, loans, credit card debts, fixed monthly outgoings and optional expenses. Then, weed out the non-essentials to find out how much you actually NEED to live on each month to survive and keep the wolves from your door.

Embark on a Cash Diet

Pounds and pennies can quickly burn a hole in your pocket and you may not even be conscious of the many times you dig deep for seemingly inconsequential expenditure – a newspaper, coffee, bar of chocolate, spare coins for a busker or charity box. All these little bits add up. Give yourself a cash allowance that is intended to cover only those things you really need each month. When it’s gone you don’t replenish the pot until the next pay day. In this way you can protect other money you have and direct it towards the repayment of debts.

Work as a Team

Battle plan to beat bankruptcyThis means you need to get the whole family on board. The kids need to know that, for example, nagging for treats on the weekly shop will get them nowhere. Encourage them to help you save instead by opting for lower-priced items, finding coupons and bagging deals. Incentivise them by agreeing to give them a share of what they save.

Liquidate some of your Assets

Most of us have stuff in our homes that we’re not particularly attached to, but which may have value to someone else. Sell some things on eBay, throw a garage sale, visit Cash Convertors, or place a few classified ads in the free papers. You may be surprised at how much you can get for items you had written off as having no value.

Talk to your Lenders

Yes, those scary-faced people behind your debts. Lenders expend an inordinate amount of time and energy in pursuing money owed to them. If you take the initiative and go to talk with them yourself, you will often find they are amenable to working out a debt repayment plan with you that is more affordable than their standard demands.

Get some Counselling

Consumer credit counselling is freely available via the CAB and other organisations. It is their raison d’être to help you, so go and see what they have to say. You may find that they can help you create a workable budget for your family and help you in contacting your creditors to agree a debt recovery plan that you are in control of.

Seek a Second, or Part-Time, Job

After a long day or week at work, the last thing you may want to do is go out earning again. But as a short-term solution to beating your own personal debt crisis it may be a price worth paying. There are many evening, night and weekend jobs you could try that may just pay enough to cover your extra repayments and help you to avoid the bankruptcy option.

Not everyone will be ready, willing or able to follow all of the above steps. But if you can galvanise yourself into a least a little action then it may be sufficient to help you avoid bankruptcy and help to get you have on the right financial track.



About Cally Worden

About Cally Worden

Seasoned freelance writer Cally Worden lives with her family and dog in a quiet corner of rural France. A love of the outdoors, and a fascination with her children's ability to view life with fresh eyes provide the inspiration for much of her work. Cally writes regularly for various websites and UK print publications on subjects as diverse as parenting, travel, lifestyle, and business, and anything that makes her smile.

Website: Cally Worden

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