If you are willing to stick to a tight budget and plan out every dollar that you spend, you can possibly avoid bankruptcy. You have to be willing to live differently than you have been, though, for this to work because you have to make serious spending cuts.
There are a lot of reasons why this is a good plan to avoid personal bankruptcy. If you file for bankruptcy, it is going to affect every aspect of your life and it will stay with you for as long as 20 years. You will have a very difficult time getting any sort of credit if you do not avoid bankruptcy.
You have to have a plan in order to avoid bankruptcy; you cannot just wing it. You will need to take a very close look at your income and your expenses and you have to really want to lower the amount of debt you have for this to work. You will have to make sacrifices in order to avoid filing bankruptcy, but it is well worth it to keep your credit and your life intact. It is possible to take the steps to avoid bankruptcy by yourself, but you can also consider consulting a lawyer specializing in bankruptcy to help you.
In most cases, you are worried about how to avoid bankruptcy because you have more debt than you do income. This needs to be turned around. You need to find ways to avoid bankruptcy by bringing more money in so you can lower the amount of debt you have. One way you can bring in extra money to pay off your debt is by taking on a second job. You have other options, bankruptcy alternatives though, when it comes to reducing your debt and increasing your income.
Working with a bankruptcy attorney to avoid bankruptcy
At your first meeting with a bankruptcy lawyer, you will fill out a form that will tell the attorney exactly what kind of financial shape you are in. The bankruptcy attorney will work with you, if possible, to make changes to your budget to help reduce your debt and avoid bankruptcy. He may suggest that you sell off some of your valuables to raise money to put towards your debt. Some people have to sell their house to avoid filing bankruptcy because the payments are too high for them to manage. If you do this, you can use the equity from the home to find a more reasonably price.
If you work with a bankruptcy lawyer, you can enlist him to help you work out a better deal with your creditors than you currently have. He can sometimes negotiate a lower payment on your loans including the loan for your vehicle. The lawyer can look at your expenses one at a time and see if he can get them down to where they need to be.
The most useful thing you can do to avoid personal bankruptcy is to come up with a strict budget and not spend anything that is not in the budget. You do not want to have to sell your assets, of course, but it may be worth it to avoid bankruptcy.