The 7 Basic Steps to Avoiding Bankruptcy
Bankruptcy is a scary word for most people. The idea of having a negative impact on your credit report for up to 10 years is enough to make you think twice. However, it’s important to remember that a lawsuit, repossession or foreclosure will have the same if not worse affect on your overall credit rating. That’s why Illinois law provides bankruptcy as an option for financially distressed individuals.
If you’re wondering how to avoid bankruptcy, here are 7 steps that will go a long way:
- Seek professional advice. If you are in a financial mess, you need to know your options for recovery. There are many situations you can get into yourself but may not be able to get out of without experienced help.
- Learn from your mistakes. Take a look at what went wrong and try to not repeat those mistakes again. If you used your credit card for everything, even groceries or to pay your electric bill, then you know that you threw away hard earned money each month on high interest payments.
- Repair your credit report. A professional may be needed here as well. Your credit report is a very important tool for you to save money on loans, get cheaper insurance rates and even gain employment. Make sure to dispute false reports and do your best to raise your score.
- Obtain credit and pay it on time. You need to establish good credit to fade out the bad, so open a loan and pay on it faithfully. If you get a credit card, be sure to only use it sparingly and always make the payment on time.
- Pay your bills on time, every time. If it means you cannot go to the movies Friday night because you only have enough money for your credit card statement, then you skip the movies and pay your bill. You may try a private loan to consolidate your high interest payments into one affordable monthly payment.
- Use your cash and leave the credit card at home. If you go in to pick up a gallon of milk, use cash, never put items that you can pay cash for on your credit card. The $3 gallon of milk can turn into $20 by the time you pay the interest!
- Debt consolidation can be considered. You can place all your debt into one loan and an experienced attorney can even negotiate your balances down to a more manageable payoff.
Call 312-273-1217 today for a free consultation and appointment with an experienced law firm with more than 50 years experience in bankruptcy and debt consolidation issues. We have night and weekend appointments available at all our eight Chicagoland locations.
By Kerrie Neal