Sometimes, bankruptcy seems like the only possible option. Sometimes, bankruptcy really is the only available option left. But sometimes, it can be avoided. The idea of having all or a large portion of your debt forgiven is a tempting one, but thatu2019s not all that there is to bankruptcy. It isnu2019t a magic reset button to get your life back. In fact, your life will be far from the same after your file. In most cases, youu2019ll be put on a strict budget to ensure that you donu2019t get yourself into debt again. And in all cases, your credit will take a tremendous hit for seven years. This will affect your ability to get loans, jobs, and limit your housing options. So before you take the plunge, meet with a financial advisor and take a look at budgeting options to help you regain your footing.

Sell some of your assets

It can be hard to part with your things. But one of the best ways to pay off debt, is to sell all of the things you can live without, and use this lump sum to pay off as much of your debts as possible. You can sell things like furniture, jewelry, and electronics on ebay or craigslist, or you can even have a yard sale to sell as many of your things at once as possible. This may seem like a radical option, but remember that these things are temporal. You can always get more things to replace what you are selling, in the future when youu2019ve paid off your debts and can afford it. Many people have a hard time trying to do something like this, but itu2019s the best way to pay off a large portion of debt.

Tell creditors that you need help avoiding bankruptcy

In most cases, those that you are in debt to, would rather you pay them anything rather than nothing. Explain your situation, that you are struggling to pay, and trying to avoid bankruptcy. Often, you can negotiate a smaller payment or smaller interest rate, or even both. Although being transparent in this way may hurt your pride, it could potentially save you from bankruptcy.

Cut out the non essentials

Yes, youu2019ve heard this tip before. Yawn, next. But what do you actually consider to be essential? Your landline phone? Your second car? Cable or satellite television? A phone for your 12 year old? Cutting out these things may seem harsh, but these are costly monthly bills that will save you so much money if you just bite the bullet and slash your budget.

A Budget To Help You Avoid Bankruptcy

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