Personal bankruptcy is not much different from the corporate one. Actually in United States Bankrupcy Code same chapters are applied for both cases. 2008 and the following years were very hard when it comes to both personal and corporate finances. Economic crises the shook the world, left many Americans without their jobs, homes or savings. Now things are not that dramatic, but the post-recession years also lead some people to ask for the bankruptcy discharge. Most of them don’t know that they’re able to survive the crises, by doing certain specific actions, and without asking authorities for help. In this article we’re giving you the steps on how to recover from financial catastrophe.
Gather All of Your Possessions
Personal financial crises, and of course the bankruptcy are states of high alert, and if you were saving money for the rainy days, it really can’t get more wet than that. In addition to these savings you should also gather your children’s college funds, retirement funds and estimate the value of all of your material possessions. The final figure is the amount of money you have. Most of the Americans are gathering possessions they don’t really need all their life, and this is definitely the time to pawn most of those.
Determine the Total Amount of Your Debt
Count all of your mortgages, credit cards, student debt, literally all the money you owe. Try covering some part of it with the money from your savings accounts. Sell some of the luxury items from your possession, and get rid of everything that is not necessary.
Contact Your Creditors
Call all of your creditors and explain your situation to them. Don’t expect them to be too sympathetic, but since this situation can also affect their business, try to find a way to agree on more favorable debt recovery plan. When it comes to creditors, your inability to pay back the debt is concerning them as much as it concerns yourself, so don’t take no for an answer. Offer them regular token payments, because creditors are always more supportive for clients that are at least trying to pay back their debt instead of declaring personal bankruptcy.
Cut Your Costs
This is one of the hardest steps, since you need to renounce from all the luxuries you used to spend your money on. You need to stop eating outside, drinking fancy wines, buying designer clothes etc. But luxuries like these are not the only enemy to your solvency. There are number of other expensive things most people can live without. Your car is one of those things. In most big cities there’s a very functional public transport network, and of course there are also many ride share websites nowadays. Also cancel subscriptions you may have, such as those to a penny stock newsletter. Couponing is also a good way to save on buying groceries and it is much less expensive to live with one or several roommates, than by yourself. You can find plenty more ways to cut your costs online.
If your current salary can’t cover your living expenses and monthly payments to your creditors, you should find another part-time work. This can be anything from, from waitering to landscaping, but by far the most profitable part-time jobs today are the freelance ones. Use your profession wisely and start a consulting or freelancing on the side. For finding your first clients you can register at some of the popular freelancing market places. No matter what you do, be very determined to get the part-time job or to satisfy your freelance client. If competition is big try outbidding them with asking for a lower salary or offering some extra gifts or services.
By following all these steps you will be able to overcome all the hardships of financial bankruptcy. Remember to always be honest with your friends and family about the situation you’re in and you’ll always be able count on their support.