Friday, June 17, 2022
HomeFactsHow To Avoid Bankruptcy And Overextending Your Finances

How To Avoid Bankruptcy And Overextending Your Finances

How Do I Declare Bankruptcy

How to manage your Finances as a Student||Say No to being bankrupt|| Avoid Financial Mismanagement

You can go bankrupt in one of two main ways. The more common route is to voluntarily file for bankruptcy. The second way is for creditors to ask the court to order a person bankrupt.

There are several ways to file bankruptcy, each with pros and cons. You may want to consult a lawyer before proceeding so you can figure out the best fit for your circumstances.

Consequences Of Declaring Bankruptcy

In certain situations the BAPCPA requires those filing for bankruptcy to:

  • Attend mandatory credit counseling
  • Make ongoing payments to creditors
  • Attend mandatory financial-management education

What’s more, filing for bankruptcy doesnt necessarily exempt you from lawsuits, eviction, or a suspension of your drivers license if you have unpaid fines. Filers also end up with a poor , which can result in the inability to borrow money at standard rates for up to 10 years. This may lead to greater debt, because the only loans you can get come with a high interest rate.

Preventing Medical Bankruptcy

Consider A Secured Credit Card

Unsecured credit cards can be hard to qualify for if your credit score is tarnished after bankruptcy. A secured credit card is different from a traditional credit card, and it can be a way for you to start rebuilding your credit.

With a secured credit card, you make a deposit and that determines your spending limit. For example, if you deposit $500 on a card, that becomes your spending limit. You can then use the credit card, and make payments on your balance, like a regular credit card, which can improve your credit. If youre unable to make payments, the deposit acts as collateral and covers any balance you cant repay.

If you always make your payments on time, you may build your credit up enough to qualify for an unsecured credit card next time you need to apply for credit. Some secured credit cards allow you to upgrade to an unsecured card with a higher spending limit without the deposit.

Secured credit cards are relatively easy to qualify for, since there isnt much of a risk to the lender because your deposit covers any potential loss.

Recommended Reading: Did Donald Trump File Bankruptcy

Keep Your Balances Low

Once youve been discharged from bankruptcy, your debt to income ratio is usually much lower than it was when you first filed. Your DTI is a major factor when you apply for new credit. If most of your income is already being used to pay for your current bills, it can be hard to get approved for things that you need, like a car loan or a mortgage.

After youve completed a bankruptcy successfully, much of your debt has either been paid off or discharged. Try to keep any new debt, notably any new credit cards that you choose to take on, at a lower balance. Most credit experts recommend that you keep your credit cards balances below 30% of their spending limits any higher and you could risk lowering your credit score even further.

Work With Reputable Professionals

Avoid Bankruptcy Stop for Eclosure  How To Handle Your ...

If you will be purchasing a home or going through a similar financial change, you should enlist the help of experienced professionals. In addition to speaking with a financial advisor, you will also want to find the best realtor in your area. Getting advice and assistance from a handful of trained and trustworthy professionals could end up saving you quite a bit of money in the coming years. Preparing for your life to change can be scary and stressful. You dont need the unexpected to happen or for your finances to fail, so its essential to remain on top of even the little things like your bank account. Once your finances are stable and a significant life change has occurred, you should revisit your bank account in a few months to ensure you are moving in the right direction. With a little bit of hard work and some careful planning, you will be able to tackle almost any financial issue that life throws your way. Or, at the very least, be able to figure out what to do when you hit a few bumps in the road.

You might also like:

Read Also: Personal Loans After Bankruptcy Discharge

How To Rebuild Your Credit After Bankruptcy

On Behalf of Law Offices of Buddy D. Ford, P.A. | Feb 7, 2020 | chapter 11 bankruptcy for individuals

Bankruptcy is a chance to reconcile the past with a fresh start. Reorganize debt and protect your assets from creditors. Regain firm financial footing. Rebuild your confidence and dignity.

It does not have to be so daunting because you are not alone. Almost 97% of bankruptcy filings are by people, not businesses. Make no mistake, the process will weaken your credit score, especially in the short term. It will take diligence and patience before convincing banks and credit card companies to lend you money again. But there is a way out.

How To Avoid Bankruptcy Relapse

For many, bankruptcy is a once-in-a-lifetime solution to an unexpected debt crisis. Perhaps you overextended yourself in early adulthood or a medical issue cost far more than you were prepared to pay. Regardless why bankruptcy was necessary, it was a tool available to help you improve your situation and move forward with your life.

Unfortunately for some, financial struggles are an ongoing fact of life. Bankruptcy is used to resolve one phase of financial issues, but down the road many of the same issues arise again and bankruptcy is once again needed.

Statistics show nearly 30% of bankruptcy filing in 2011 were from people who had already filed within the previous eight years. With an economy that is just shuffling along with no major growth in sight, chances are that percentage is likely to hover around one-third for the foreseeable future.

Though bankruptcy can be a valuable resource to help you get back on track, nobody wants to relapse. It can be devastating to find yourself in the same hole that led to your initial bankruptcy, and it can leave you feeling desperate and alone.

Here are a few tips to help you avoid bankruptcy relapse:

Recommended Reading: What Is A Good Bankruptcy Score

How To Avoid Bankruptcy

In these economic times, more and more people are filing for personal and business bankruptcy. While bankruptcy can truly be a lifesaver, protecting your home and your assets from creditors, it should be the last option to deal with your money troubles. Far better is looking at your financial health and trying to fix it before things reach bottom.

First, give yourself a financial checkup. Many people run into difficulty when their credit cards get to be more than they can afford. Ask yourself these questions:

  • Are you making only the minimum payment on your credit cards each month?
  • Are you using your credit cards to pay for necessities, such as food and medicine, because you don’t have the cash?
  • Are you using your credit cards to get cash advances for normal expenses?
  • Are you making your monthly payment after the due date?
  • Are your credit card balances more than your liquid assets?

If you answer Yes” to two or more of these questions, you may be headed for trouble.

If things aren’t too bad, we usually recommend a three-prong approach:1. Know where your money is going.2. Develop a budget.3. Develop a plan.

Develop a budget. Once you know where your money is going, create a budget by examining your spending patterns and looking at ways of maximizing your available resources. Many expenses may need to be cut back until spending is brought under control and bills are paid.

Learn Everything You Need To Know And The Steps You Can Take To Keep Your Small Business Out Of Bankruptcy

Avoid Bankruptcy Through Debt Settlement

As a small business owner, its important to celebrate the wins and focus on all the ways your business is succeeding.

But its just as important to consider some of the challenges that your business may face and that includes the potential of going bankrupt.

No one wants to think about the potential of their business going bankrupt. But by understanding the steps you need to take to protect your business, you can avoid facing bankruptcy in the futureand keep your business solvent and moving forward.

So what, exactly, are the steps you need to take? Lets take a look at everything you need to know to protect your small business from bankruptcy.

Recommended Reading: Trump Filed Bankruptcy How Many Times

Bankruptcy Discharge Freezes Up Your Income For Important Costs

When you spend a large portion of your monthly income paying the minimum possible payment on debt, you will never overcome that debt. It will continue to increase over time and eat up more and more of your budget.

Filing for bankruptcy and discharging unsecured debt such as credit cards and medical debt can help ensure that you have enough money in your monthly budget to cover all of your most critical expenses, such as your mortgage and cost of living expenses.

Tips On How To Avoid Bankruptcy From Various Members Our Project Campfire Community

Many people, even those who had been financially comfortable, are now wondering how they will pay their bills. Consumers typically file either chapter 7 or chapter 13 personal bankruptcy depending upon your financial situation. Bankruptcy is a last resort for many people in debt. Paying your debts or filing for. Know about 5 alternative options like debt settlement, consolidation, diy plans, and more. If your financial situation makes you think about claiming bankruptcy, first take a look at this article to If you are serious about getting your finances on the right track, you need to get out of debt and stay out of debt. Business owners avoid bankruptcy by managing their finances properly and avoiding too many investments at once. They may be able to shed some additional light on. If those two numbers are bad, you’re heading for trouble. If you aren’t doing a budget and you are thinking about bankruptcy, then you haven’t taken the most basic of steps in getting your finances in. Let them know you are considering bankruptcy and would like to avoid it if possible. We’ll explain how to avoid bankruptcy by getting real with your finances.

Don’t Miss: Toygaroo After Shark Tank

Build A Healthy Personal Finance Routine

One of the best ways that you can do to change long-term behaviors is to change short-term habits.

The most effective way of increasing my personal credit score has been having a long history of paying off the balance on my credit card, said Jacqueline Sanchez, a real estate developer and co-owner of Invested Wallet.

For Sanchez, keeping an organized track record of her finances has been a game-changer in her personal finance routine. For my personal household finances, I use Google spreadsheets. I created custom formulas and have multiple categories to track my households spending. I followed this practice before starting a small business. However, when I started my small business, I used Quickbooks since I didnt have as many transactions starting, she added.

While you do need a good credit history for a good credit score, try spending the money you already have on your debit card. Use your credit card for points and rewards but make sure you already have the money to pay your debt off at the end of the month!

See: 19 Ways To Tackle Your Budget and Manage Your Debt

What Types Of Debt Cant Be Discharged By Filing Bankruptcy In Kansas

7 Steps to Avoid Chapter 7 Bankruptcy

Filing for bankruptcy doesnt mean that every single debt you have will go away. There are exceptions under Kansas law. These include:

  • Back child support and alimony
  • Student loans
  • Income tax debts incurred within the past three years, plus all other tax debts
  • Legal fines and penalties, including tickets
  • Debts owed for an injury or death that were the result of a DUI

These apply to both chapter 7 and chapter 13 bankruptcies in Kansas. You must also continue to pay secured debts if you want to keep the property.

In chapter 7 bankruptcies, a judge may rule certain types of debt non-dischargeable if they are challenged by the creditor. These can include credit purchases of luxury goods within 60 days of filing, loans or cash advances of $1,150 or more within 60 days of filing, debts incurred through illegal activity, and certain debts owed under a divorce decree.

Read Also: Can You Rent An Apartment After Filing Bankruptcy

Filing For Bankruptcy In Kansas: What You Need To Know

Bankruptcy and Reorganization |

If you get in over your head in debt and the bills continue to pile up, you may wonder if filing bankruptcy is the way to go. Under Kansas law, bankruptcy is meant to be a last-resort option. It isnt a cure-all for all financial ills. However, there are situations where bankruptcy can provide a much-needed fresh start or more breathing room to get finances under control.

Heres what you need to know about filing for bankruptcy in Kansas.

The Repercussions Of Disclosure

Of course there is the embarrassment and sense of failure that may come with my house is being foreclosed situation. This is difficult to deal with when you are already under the financial stress that has led you here. Then there is the worry about how quickly you will have to vacate your home. The next problem is trying to find another place to live. Stop foreclosure options seem to be only viable if your financial situation is temporary. If this is not the case then the negative effects of foreclosure will carry forward . This is because foreclosure also impacts your .

Read Also: Can You Get A Personal Loan After Bankruptcy

Look At The Reality Of The Situation

Above all, don’t stick your head in the sand. Trying to make your problems look better than they are, or denying them altogether, won’t help you. Take a hard look at the reality of the situation. To do this, draw up a budget that will help you find out exactly where you stand.

Are your expenses higher than your revenues?

You’re over-indebted when:

  • you consistently have a hard time making payments on your credit cards
  • you’re late in repaying your debts
  • you regularly use your line of credit to finance basic expenses such as groceries or rent

Admitting that you’re overextending your credit is a first step in the right direction.

Now you can evaluate whether your situation is critical or it’s simply a question of managing your personal finances.

When the situation becomes clear to you, move on to step 2.

First What Are The Types Of Bankruptcy For Individuals In Kansas

How To Keep Your House While Being Made Bankrupt (UK) – Bankruptcy #2

The two most common types of bankruptcy for individuals are chapter 7 and chapter 13.

  • A chapter 7 bankruptcy, or straight bankruptcy, liquidates your assets to pay off as much of your debt as possible. Under Kansas law, there are types of property that are exempt from this liquidation up to a certain amount. These can include a primary residence, a vehicle that is used to commute to work, and certain insurance policies and benefits. A bankruptcy attorney can help you understand these Kansas bankruptcy exemptions so you know exactly whats at stake. The debt that remains after liquidation is discharged, though there are exceptionsthose will be covered in a bit. Common reasons for filing chapter 7 bankruptcy include large medical bills, extended unemployment, and overextended credit. Keep in mind that a chapter 7 bankruptcy doesnt cancel the rights of creditors who hold secured loans, like a mortgage or car loan. They still have the right to take the property to cover the debt if youre behind on payments.
  • A chapter 13 bankruptcy, or reorganization bankruptcy, adjusts your debt using a repayment plan. Debt is paid off over a period of three to five years, and if the terms are kept, the debt remaining is discharged . Its commonly used when people have a steady income and want to keep their non-exempt property, but need some breathing room to pay back outstanding debts or avoid foreclosure.

Don’t Miss: Trump Bankruptcies How Many

Tip # : Learn To Say No

Sometimes, we simply have to say no. Whether it is giving away your free time or undervaluing your product, you are not helping anyone by always being agreeable. Hesitate before you say yes.

Take the time you need to think about it. What may appear as an opportunity too good to pass up in the moment may appear after contemplation as a ghostly apparition in disguise.

VTS , a leasing and asset management platform, was included in the 2016 list of best medium workplaces in the United States.

Thrive Global published an interview with Michelle McComb, VTS Chief Financial Officer, in 2019. One of the leadership lessons the CFO shared is to not overextend or under-deliver. She explained that she had welcomed challenges earlier in her career that were not her bailiwick. Since then, she learned to say no. You want to deliver quality work, and in order to do that, your wheelhouse needs to be in order.

On a personal level, look out for the telltale signs that you need to take a break, reprioritize or shift your focus. Be resolute in monitoring personal finances by keeping a record of your monthly expenditures and income. Avoid spending more than you have to ensure you are always prepared for emergencies. After all, change is a certainty.

  • Do you think your business is currently over extended?
  • What tips listed above can you use to avoid overextension in your business?
  • Tips To Help You Avoid Bankruptcy

    By | Submitted On February 06, 2007

    Bankruptcy can be a very serious financial last resort that can leave you with years of negative financial effects to deal with. While filing bankruptcy is an option that you can use if you have nothing else to resort to, it is best to start dealing with your financial problems before you end up needing to file bankruptcy. Since there are so many negative effects of bankruptcy, it is important that you start making changes today so that you can avoid the difficulties associated with filing bankruptcy. Taking the right financial measures early can help you prevent the financial disaster of bankruptcy.

    Start Using a Budget

    One of the first things you can do to help improve your financial standing and avoid bankruptcy is to get started using a budget that is reasonable for you and your family. Determine what you make each month, what you have in bills, and then see what you have left to spend. If you stick to your budget each month, you can decrease the amount of credit card debt you will be accruing and you can also budget in a savings account as well. If you make a budget and stick to it, you will be able to keep yourself from going on spending sprees that can lead down the path to bankruptcy.

    Avoid Overextending Credit Card Debt

    Talk With Your Creditors

    Consolidate Debt

    Alan King is a writer that concentrates on helping people better their station in life, for more information you NEED to know on your credit visit his site at

    Also Check: Can You File Bankruptcy On Student Loans In Missouri

    RELATED ARTICLES

    Popular Articles