10 Ways to Fix Finances

Written by jessica Alba

When money becomes a problem, bankruptcy law is generally the solution of last resort. But, what do you do, when there seems to be no light at the end of the tunnel? Financial problems are adversely affecting every facet of your life. At home, the tension is as thick as pea soup. So, before you surrender to you financial woes, try these 10 ways to improve your financial outlook.

Even though you may have to claim bankruptcy, you need to relieve the pressures of your finances now.

So, here are a few things you can do to ease the tension, while preparing for the possibility of filing for bankruptcy.

Nix the Guilt

Your financial situation is what it is. It will do you absolutely no good to spend needless hours raking yourself over the coals, so to speak. Even if you current dilemma is due to a series of poor financial decisions, berating yourself will not make things any better. Instead, it is time to start making wise financial choices, starting today. Do not waste valuable time wallowing in self pity, fighting about money, or trying to determine where it all went wrong. Simply get busy improving your financial outlook.

No more Credit Cards

Probably the number one reason most people get into financial trouble, in the first place, is the ease of pulling out the plastic every time they make a purchase. Whether it is a couple of bucks here and there for a trip to the convenience store for a cup of coffee or a major purchase, it all adds up. Before you know it, the minimum payment is beyond your budget and you are in too much debt and facing bankruptcy.

So, cut up ALL of your credit cards today. Yes, it will feel like you are throwing away your security blanket, but it is one way to avoid bankruptcy, or get a fresh start after filing for bankruptcy. Make no more purchases on credit. Pay for everything in cash. Then, in the future, when you get credit card offers in the mail, throw them away. Never go there again.

Credit Reports

To help ease the pressure and speculation of your financial well-being, look up your credit reports. 3 major agencies keep track of everyone who has a credit history. Although each file should say basically the same thing, the reports can be different. So, make sure you get all 3, and know exactly where you stand financially.

Your credit report is exactly what lenders look at before granting you a loan. Potential employers also have the right to check your credit, if they are looking to hire a financially responsible. So, do not be blind-sighted. Instead, be informed. Check your own credit report. Know where you stand.

Monitor your Money

How many times have you asked yourself where the money has gone? It is like melted butter. It just slips through your fingers. Can you account for every penny? If the answer is ‘no’, it is definitely time to change you ways. Maybe you will be able to avoid filing bankruptcy. But even if it is inevitable, your future depends on this practice.

Keep track of where every penny is spent. It does not matter if it is a house payment or a cup of coffee; write it down. Then, you have the information you need to change your spending habits. You need to start considering what you absolutely need as opposed to what you want.

You will be surprised at how much money is spent that is not necessary for your basic needs. For example, the grocery store is a mine field of overspending. Start by buying generic brands, rather than name brand items. If you read the labels, most of the time the ingredients are exactly the same; but, you are paying for the name.

Also, avoid buying snacks and other wanted items. Forget buying sodas, candy, chips and dip, ice cream. You will find that you save a significant amount at the end of the month.

If you are struggling with money, now is the time to tighten your financial belt. For example, you do not need cable television. You do not need to go to a fast food restaurant a couple times a week. You do not need to go out with friends on a Friday night. So, monitor your money and separate your financial needs and your wants.

Separate Accounts

If you are married or have a significant other, get your name off of joint accounts. If you are having financial troubles, it will only bring you both down, if one or the other files for bankruptcy. You want to make sure that you are only held responsible for the debts you personally incurred, not those of your spouse or partner.

So, now you know of 5 things you can do to ease the money crunch. Although it sounds easy, it will require you to change how you view money and your spending habits. But, you can do it. You will also feel better and under less stress, when you learn to control your finances, instead of letting your finances control you.

Stop Throwing Good Money after Bad

If you are on the brink of bankruptcy, stop throwing good money after bad. Right now, you main concern is keeping a roof overhead and putting food on the table. If you are trying to make partial payments to credit card companies, stop. If it has come to a few bucks here and there for various creditors, you are probably only putting of the inevitable.

Besides, after filing for chapter 7 bankruptcy, most or all of those credit card debts will be forgiven anyway. The purpose of bankruptcy is to give you a clean slate, a fresh start. If you are trying to at least pay a little on each credit card, right now you are just throwing good money after bad.

Call a Lawyer

Chances are that if you have not been able to make regular house payments, foreclosure is just a matter of time. Also, if you have not been able to pay the monthly bills, creditors are going to be suing you sooner than later. So, before the other shoe drops, so to speak, take control of your financial situation and call a bankruptcy lawyer.
If you get sued and do not respond, you will automatically have a judgment against you. So, be proactive and do what is right to protect yourself and your family during hard times.

What is it Worth?

If bill collectors have come knocking and you know bankruptcy is just around the corner, you need to find out what your major assets are worth. For example, go to www.kbb.com and find out the blue book value on your car. You want to know what it is worth, if you sold it today. You probably owe a lot more on the vehicle than it is actually worth. The depreciation is significant the moment you drive the car off the dealership lot. Unfortunately, it is downhill from there. So, you would be better off to sell the car, rather than to wait for it to be repossessed.

The same goes for your house, boat, camper, or any other big ticket item you may own. Find out what it is actually worth, before you file bankruptcy. In most cases, you can get more money than the bank will, if they foreclose or repossess your stuff.

Empty Certain Accounts

Also, it would be in your best interests to take the money out of any accounts that are at the same bank to which you owe a debt. If you do not take that money and ensure it goes to your basic necessities of living, they will take it to satisfy some of the loan. If they have an inkling that you are about to file bankruptcy, they will seize the money.

So, now is the time to take control of your finances and make sure that money is used for food and shelter. Forget the mall and new clothes. When your financial future is brighter, you can consider shopping. Right now, use the money for survival, and that is all.

Personal Inventory

Finally, take an inventory of your financial situation. Take stock of your assets and your debts. Record how you spend your money. Find out where you can cut back. Think of it as a pie chart. Right now, the only money going out should be on the things you absolute have to have to survive-a roof over your head and food on the table.

Even if you do not file for bankruptcy, know where your money is going and trim off the fat from your budget. No, the kids will not like only having the bare necessities for food. The piano lessons and trips to the movies may be a thing of the past. But, you will survive until financial times get better. After all, once you get off this path of financial hardship, you do not ever want to walk down it again.

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