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Sometimes debts can be unavoidable when they form part of your day to day life. Debts may not be an issue to you as long as you settle them as required by the creditors. If you are in a situation of not being able to pay your creditors the debts you owe them, then you are in a bankruptcy position.
The following are some of the tips on how you can get out of bankruptcy:
Find out the total value of your debts.
When you are bankrupt, it is important to first calculate the total value of your debts. You will be required to identify all your creditors and list them down. Identify how much money each creditor is expecting from you and find out whether there is any debt that is accruing interest. This will be your starting point.
Find out which debts are more urgent
More urgent debts are those debts that can leave you in trouble if they are not settled as early as expected. In most cases the more urgent debts may result in you being penalised highly such that you may end up paying a higher value of money than the original amount. Some debts may even end up in court if not settled on time. If in any chance you are able to get any funds, it’s good to give the most urgent debts a priority.
Identify any sources of income that you may be having that will assist you in paying out your debts
Review your resources and identify which ones can assist you settle out your debts. Settle out all your urgent debts first with the available resources. After you have paid your priority debts, look at the less urgent debts and try to find you how you can be able to settle them out.
Contact all your creditors and talk to them about your debts
Make arrangements with your creditors on paying back whatever you owe to them. Try to make them understand your situation and show your concern for the debts you owe them. Show them how industrious you are in looking for the money to clear the debts.
Negotiate with your creditors on the options that you have on paying the debts that you owe
Creditors will want to hear what plans you have for them. Give them an idea of restructuring the debts by extending the period of repayment to make it affordable to you. Try to find out if you can repay some debts using other ways such as exchange for a particular asset. You can also decide to offer specific services to the creditors as a repayment option.
Also going with a good bankruptcy lawyer who understands the process can truly make the world of difference in speeding things up and navigating through everything.
Reduce allocation on the current unnecessary expenditure
I identify all your monthly expenses. Find out which monthly expenses are not necessary. It is important to do away with any unnecessary costs and instead reallocate the money used on these expenses for debt repayment.
Bankruptcy is not the end of a comfortable good life. With the application of the above bankruptcy tips, you can work it out of being bankrupt and get back to your normal day to day life. However once you are out of bankruptcy, it’s important to come up with a proper budget that will make you responsible for your debts.