Five Steps To Help Avoid Bankruptcy

 By: Campbell Grenier
According to a 2008 survey by the American Payroll Association, 71 percent of American workers are living paycheck to paycheck. If you are one of the many who live paycheck to paycheck, or if you have fallen behind, here are some tips that can help you get back on track:

Develop a Budget

It seems like a no-brainer, however developing a budget is fundamental to reaching your financial goals. Many people find themselves in debt not out of blatant mismanagement, but because they lack a plan. By creating a budget that accounts for every spending category and dollar that you spend each month, you can see where your money is actually going. By sticking to the budget, you can regain control and be sure that you financial plans are being fulfilled.
Automatic Deduction

Automatic deduction is a helpful way to stick to your budget is by allowing them to be paid directly from a checking account. By setting up automatic deduction, you can be sure that your bills are paid on time and in full.

Cut Excess Expenditures

Trips to the coffee shop and vending machines might seem harmless, but the expenditures add up. If you are living paycheck to paycheck, it is important to streamline your budget in any way possible, and one of the easiest ways to do that is by cutting out any excess expenditures that pop up through the month. Pinpoint where these expenditures occur and either budget for them, reduce them, or eliminate them completely.

Call Creditors and Negotiate a New Payment Plan

If you find yourself falling behind on payments to your creditors, it can never hurt to give them a call and negotiate a new agreement. Your creditors would rather get some money than none at all. By taking the initiative to contact them, you may even win some favor in their eyes.

Be Wary of Credit Scams

By searching the Internet, you would think that getting out of debt is no big deal. After all, there are a million quick and easy ways to get out of debt through debt management, debt settlement, credit counseling, or some other solution. While some of these solutions can be helpful, some are no more than petty scams. Be wary of solutions that require you to pay money upfront and sound too good to be true. They probably are.

Find out if Bankruptcy is Right for You

Some people may be too deep in debt for any of the above solutions to realistically work for them. That's when bankruptcy is a good option. If you are seriously considering bankruptcy and you live in Utah, you need to consult with a Utah bankruptcy attorney. While the process appears complicated, a Utah bankruptcy lawyer will be able to help you understand your options and avoid making bad decisions that you could later regret.
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In our previous installment on life after bankruptcy we discussed the curveball filing for bankruptcy can throw at you. In this installment we will continue to review ways in which you can rebuild your financial life after filing for chapter 7 bankruptcy or chapter 13 bankruptcy. Bankruptcy attorneys recommend that individuals who have filed for bankruptcy begin to re-establish their credit as soon as they possibly can.
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