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5 Tips and Strategies to Avoid Filing for Bankruptcy – Part 2

5 Tips and Strategies to Avoid Filing for Bankruptcy – Part 2

On our last entry we took an in-depth look at the first two out of five strategies that anyone facing the prospect of bankruptcy could apply to their financial life to avoid it.

This time, let’s continue looking at the remaining three of these tips.

3. Ask for financial help from family and friends

there is no need to say that it usually take a lot of pride-swallowing when it comes to asking a relative or friend for a personal loan or other kind of financial aid. On top of that, there are many stories of great friendships that have been ruined over money. But if your situation is really as dire as to be considering bankruptcy, then you should’t be ashamed of using this approach.

Of course, since this is your family and friends we are talking about, you should seriously consider your financial situation and your ability to repay those personal loans to them, since if they lend money to you that means they trust you fully and you shouldn’t betray that trust.

Also, don’t forget to lay down the personal loan terms so as to avoid future confusion and conflicts.

4. Consider restructuring your mortgage if you have one

If you happen to have a mortgage, one of the most helpful things you can do to aid your financial situation is to refinance it. All you have to do to achieve this is to arrange a meeting with your bank or lender and to set a new payment plan that will allow you to save that extra money and put it toward repaying your personal loan to avoid bankruptcy.

As to how to go for it, there are currently two different ways in which refinancing can help you prevent a bankruptcy crisis. The first is to reprogram your mortgage using a new payment schedule with smaller amounts and interests. the second one would be to adjust your payment schedule by completely refinancing your mortgage or personal loan, which is like applying for a completely new one, including applying for lower interest rates and longer periods of time.

5. Make real changes in your lifestyle

While this might seem obvious for some, there are a lot of people that actually don’t look at their lifestyles first, which should be the primary place to start cutting back on their expenses. The trick if you want to achieve real savings with your current budget is to reassess your lifestyle and get rid of everything that isn’t really necessary without a second thought. This could be quite simple, like closing a few credit cards, or quite difficult for some other things you might be used to, like eating out often or paying that expensive gym membership for example.

If some expenses are too hard to go without, then consider alternatives. For example, you could cut the gym membership and start going out running with friends. This might not sound like much, but will allow you to be up to date on your personal loans and keep bankruptcy away.

And that is it. Of course, while trying out any of these strategies will help your finances, the ideal thing to do should be to follow most or all of them. That way you will really make great advances towards your goal of preventing bankruptcy.