Bankruptcy is never something one looks forward to. Taking control of debts and accepting financial responsibility is often best for all aspects of your life. For many of our clients, bankruptcy is inevitable by the time we enter the picture.
However, recognizing financial mistakes of the past and learning to modify our behavior going forward is always beneficial. Here are a few common sense tips to help keep your finances on the right path.
Financial Do’s And Dont’s:
- Don’t ever worry about “keeping up with the Jones’s”
- Don’t cash in or borrow against your retirement
- When buying a house, be prepared to pay 20% down or don’t buy at all; lock into a fixed rate; don’t escrow your taxes and insurance
- Don’t rent to own
- Don’t ever go to “loansharks”
- Don’t buy a brand new car; pay cash for a car, if at all possible
- Stop smoking, if you can; if you can’t, shop smartly
- Stay married, if at all possible
- Discuss finances openly with your spouse; don’t keep separate budgets and accounts
- Use only one credit card; avoid department store credit cards
- Learn to differentiate between “needs” and “wants”
- Don’t over withhold on your paycheck for a big tax refund; try to break even come tax time
- Don’t overinsure yourself or your belongings
- Don’t co-sign for a friend or family member, unless you’re prepared to assume the full debt and/or their bad credit
- Don’t loan money or enter into “investments” with friends or family members unless you are prepared to lose it all
- Don’t expect an inheritance to one day fix your problems
- Don’t fall for get rich quick or pyramid schemes
- Don’t think you “owe” your kids anything; teach them to be financially independent and responsible
- Replace your credit card with a debit card
- Make a budget and stick with it
Despite your best efforts, there may come a time when your debt load is too big to handle alone and you may need to consider filing for bankruptcy relief. You can normally file two types of bankruptcy – Chapter 7 liquidation and Chapter 13 reorganization. You should consult an attorney to discuss your options and see if either type of bankruptcy is right for you.
Our attorneys can help answer questions about: 1) how to keep your car or home even after filing; 2) how to restructure some of your debt into one affordable payment; and 3) how bankruptcy affects tax debt or debts resulting from a divorce.
Free Consultation with a Lawyer
For a free consultation with the Bankruptcy Clinic, PC, call 888-522-6578 toll free or contact us online.