Tips to Avoid Bankruptcy

Almost every day, it seems that there is some bad news about the rising cost of living. This is meaning increasing numbers of people are applying for bankruptcy. The prices of everyday essentials are going up at a time when most people’s incomes aren’t keeping up with the rising inflation.

Fuel bills, food and the cost of insurance– all essentials in our lives – are going up, meaning the money that’s left to pay for other things is becoming less and less. Finances are tight for most, even for people that do not need a debt management plan or debt consolidation. If you are facing bankruptcy then it is an even harder time to have money worries following the recession.

If you are already making payments towards a debt settlement plan or debt consolidation then it is important to keep these payments up to date. Anyone seeking to avoid entering into a debt management plan, debt consolidation or bankruptcy might be able to do so by tightening their expenditure and using the extra money to pay off debts.

Some good news is that there are some easy ways for people to save money and potentially prevent actions such as bankruptcy being taken. The first thing that can be done is look at your utility bills and insurance policies. Use a couple of price comparison websites to double check that you are getting the best deals available and if you are not then switch providers. Although, you need to check your contracts to make sure you can leave without incurring any financial penalties. Check your mobile phone bill and usage to see if you can move to a different network or get a cheaper contract on your existing one. If you’re not using all your minutes and texts then you are just wasting money. It’s also worth working out if a pay-as-you go phone would be more economical to use as some of the pay as you go plans these days offer free texts if you top up so much a month.

Food is another basic essential that none of us can do without. Having said this there are ways to cut food bills which saves money. It is estimated that the average family of four people wastes $680 worth of food every year, the equivalent of $56 a month. If you plan meals, preparing the meals from scratch and making sure you cook the right amount it’s easy to begin to reduce expenditure on food. Switching to cheaper brands at the supermarkets can also help shrink the bill. Giving up dining out and takeaways is yet another simple way to ensure you have more money left towards the end of the month.

If you need to save even more money to help with your debt management payments or debt consolidation then cutting out or cutting down alcohol and cigarettes will make a big difference to your cash flow as these are luxury items that have a high price at the till. This will also have a positive impact on your health.

Small things can really add up and help you tackle your debts before they build up and become a more serious problem which could lead to possible debt consolidation or worse filing for bankruptcy.

If all these ideas seem a bit drastic then think about the ultimate goal of becoming debt-free and the relief that you will feel when you can finally pay off your debt management plan or debt consolidation, which will mean that you avoid bankruptcy.