How to Survive Family Bankruptcy

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We all want financial stability in our family. We all wish for a stable job, stable income, and enough savings to secure our family’s future. But not all people are fortunate enough to invite financial stability in their lives. In fact, there are millions and millions of individuals who are already exhausting their credit limits of their credit cards, taking cash advances from one credit card to make monthly payments on another, getting calls from collection agents about delinquent accounts, and drawing on their savings to cover daily expenses. If you are in any of these situations you know where you are heading.

Financial experts have identified many reasons why people fall in to these situations. Common causes of such are:

  -Spending beyond your means.

  -Poor management of money and poor financial objectives.

  -Resorting to loans for every financial dilemma.

  -Compulsive behavior like addiction to vices, drugs, gambling and shopping.

  -Unexpected life events like death or sickness of a family member.

 

If you’re already in the bleak of bankruptcy, financial experts' advice that you follow these steps:

    1. Examine your household spending. The best way to solve any problem is to find the source of the problem. The reason why most people become bankrupt is because they are spending more than what they are earning. By examining your expenses you can actually eliminate unnecessary purchases.

    2. Avoid another loan. As much as possible, refrain from using your credit cards or resorting to another loan just to cover-up your mortgage payments. This may satisfy your immediate requirement but in the long-run, it will only burn your pockets even more.

    3. Force yourself and your family to save. Define your financial objectives and inform your family about it. If one member of the family saves and the rest spend inconsiderately, your efforts to financial stability are useless. Challenge yourself and your family to save a little, in any special way, on a daily basis.

    4. Talk to your creditors. Tell them your situation; show them hard facts so they will understand your financial dilemma. Most creditors will offer special deals like reduced interest rate, longer amortization and other special package to help you around.

   5. Pay, pay, pay. If your family’s saving activities paid off and actually resulted to extra cash in your budget, allot it immediately to your loan payments so that your loan balance will become lesser and will surely lessen your interest expenses.