I often find my clients asking, how do I avoid having to file bankruptcy and are there any alternatives that I should look into before I do this? The answer is yes, there is a way out of debt without bankruptcy. It involves the following steps, but be careful as it can compromise your future financial stability:
- Find a way to make more money, then
- Find a way to cut your expenses in a meaningful way and finally
- Use your savings to pay off the debt
IF you can do these three things for a long enough period of time AND your debts aren’t already unmanageable then you can probably find a way to make all this work. The better question to ask yourself is, IF I can do this, is it even a good idea?
There’s a cost to paying off debt
If you’re trying to achieve what I outlined above there are some things that you can cut from your daily expenses. If you’re cutting things like visits to the coffee shops for a cappuccino, your membership at the golf or tennis club or you’re cutting the cord on your cable company then go ahead. Those are wants, not needs. IF, however, you’re going without those things that are necessary like an emergency savings fund, skipping medicine or doctor visits or dipping into your retirement savings you’re playing with fire. Continuing down this dangerous path is a very bad choice. One financial mistake or misstep in this situation can lead to complete catastrophe.
YOUR future is important
Whether this financial mess was caused because of bad choices you’ve made or due to a spate of bad luck, you don’t need to make the problem worse by not having a safety net just because you’re acting out of pride. Chances are, by this point, your credit is probably ruined anyways. Far too many people come into our office with the strong conviction that because they incurred this debt they’re going to pay it, come hell or high water. While having convictions is important in life and I applaud your desire to fulfill your obligations, I would advise against repaying all of these debts IF it means that the repayment of these debts would leave you no room for improving your finances in the present or in the future. You should NEVER risk your financial stability out of some sense of pride of conviction. You’ll literally trade one bad situation for another. The biggest part of reforming your finances is looking to the future. You MUST look past the trees and see the whole forest. Your financial future starts TODAY and stretches into the next decade and into the rest of your life.
The attorneys at Harmon and Gorove are experts at providing you with all the facts you need in order to make the best decision for your financial future. We want to provide you with all the tools you need to make the best decision for you. That’s why we provide a free, no obligation consultation so we can discuss what is best for you and your individual situation. Contact us today so we can help start you down the path to financial stability today.