A bankruptcy lawyer, a good one, is just what you need to defend yourself from your creditors and come out of the ordeal in as good of shape as possible. But the best plan to fight bankruptcy is to never have to be faced with it. By taking some time to think out all of your financial moves, you can greatly reduce your risk of being faced with bankruptcy. In this article, we will discuss of few of the ways you can work to prevent from being faced with bankruptcy.
The first and easiest way to prevent yourself from facing bankruptcy is to never buy things you can’t afford. Bankruptcy happens when you owe more than you’re able to pay and what you do own is not enough to satisfy the debt you have. By not purchasing things on credit that you can’t afford, you won’t be risking your financial health. One of the major causes of the downturn in the US economy is people buying things they should have never bought because they really couldn’t afford them.
People thought that just because they were able to squeak out the payments at the beginning of the loan, they would be ok. But if one negative thing changes in your financial picture, you then cannot afford what you bought, and the bank will take it back. If you have a few things that you cannot afford, and the debt on them is more than you’re worth, you’re going to be faced with bankruptcy. The bottom line is, you don’t want your debt payments to be any more than fifty percent of your income. That may mean buying a smaller home or a less expensive car, but it’s better than losing the house or car in the end and starting with nothing again.
Another way to stay away from bankruptcy is to keep on top of your debt obligations and pay everything on time. Sometimes people can barely afford their debt and because of their carelessness, they miss a payment on accident. If they could barely afford the payments before missing payments, the late fees and possible hiked-up interest rates will really put the payment out of reach. Then they end up defaulting on the loan, which costs more. Something so small as missing a few payments could make you end up in bankruptcy. Do whatever you have to do to remember to make your payments on time. Whether it’s marking your calendar or having the payments automatically drafted from your account; it will be worth the effort.
Too many people buy things they can’t afford then miss payments they should have been making and end up in bankruptcy because of their carelessness. Staying out of bankruptcy is really common sense stuff, but people’s greed and carelessness often lean them down the path to hiring a bankruptcy lawyer.