With the decline of job opportunities and a slowly recovering economy, many are filing for bankruptcy protection from their creditors. Those seeking protection are not only those with low to modest income; professional athletes have been forced to file bankruptcy with alarming regularity. For example, professional football player, Vince Young signed a contract that paid him $26 million in the 2006 NFL draft and after 6 years he is now filing for bankruptcy. Because bankruptcy should be considered a last resort, it is important to budget your spending in accordance with your income.
How to Avoid Going Bankrupt
- Budget Your Money. It is important to have a monthly budget in order to know exactly what you are spending on and how much of your paycheck is left for other purchases.
- Pay Everything When Due. Whether you like it or not, you have monthly bills (phone, car, rent, mortgage). It is important to make these payments on time or else you may be faced with paying an added interest. Every penny counts and you do not want to pay extra money if avoidable.
- Plan Your Purchases. You may want to plan in advance for any big purchases. This way you can determine a realistic time frame needed to for that purchase and minimize the damage to your cash flow.
What To Do if Faced with Bankruptcy
- Consider Hiring an Attorney. Hiring an attorney is likely necessary because the bankruptcy process is long and at times unavoidable. A bankruptcy attorney will help you eliminate credit card debt, unsecured debt, and creditor and collections harassment.
- Get Consumer Credit Counseling. It is important to get consumer credit counseling to help you review alternatives to bankruptcy and consequences of bankruptcy.
- Decide Whether You should File for Chapter 7 or Chapter 13 Protection. You must decide if you are filing for Chapter 7 or Chapter 13 bankruptcy. For blogs about differences between Chapter 7 and Chapter 13 bankruptcy click here and here.
More detailed information about Bankruptcy can be found here.
If you are in hard financial times and need a bankruptcy attorney, you can easily find experienced bankruptcy attorneys by searching under the practice area within your state.
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