Facing bankruptcy is difficult, but even though it may seem like there’s no way out, this is not true. Every challenge has a solution and a plus side. Going through bankruptcy may seem like the darkest place to reach but the truth is, the situation is a wake-up call. It is definitely not the end of the world, and it happened to many people who got over it and were able to make a strong comeback. All it takes to recover from bankruptcy is only a few steps.
There are 4 steps though that is extremely important to follow for a fresh start towards a much brighter future after facing bankruptcy. Here are the 4 major steps that you need to take first.
1. Start a Budget Plan
You know you have so much debt and it’s super stressful, but the best way to manage this stress is to check your budget and plan how to use it wisely. One of the main reasons people go into bankruptcy is that they are not aware of how much they spend, which is a common mistake that many people make. Since we don’t use cash so often and usually pay for the stuff we buy with credit or debit cards, we don’t pay attention to the amount of money we spent and how much we have left. Suddenly, we find ourselves broke and in debt. This is why we must always check the money that’s going in and out of our pockets. You can always download banking apps where you can easily check your spending and your overall balance.
2. Consider a Title Loan
Applying for a loan can be tricky although it saves you in the short term. When you go bankrupt, you probably don’t need more debt but funding instead to pay for your other small amount dues and daily needs. With that in mind, financial experts say that getting a title loan will let you borrow money for a short period of time and your car is the guarantee to ensure you will pay back the loan. The good thing about it is that it’s like rescue money and you don’t have to have a good credit history. Just make sure you don’t ask for an amount that’s too much so you don’t lose your car. Title loans usually allow you to borrow a maximum of 50% of your car’s worth, which is pretty good and you can pay them easily.
3. Pay Bills on Time
Piling up your bills makes them expand until they become too huge for you to pay. Paying one bill at a time makes payment easier and much simpler to track. A good way to keep track of your bills is to write them down and add them to your budget plan. Once you get paid, start doing the math and put away the money you need to pay for bills. The task may seem a bit overwhelming in the beginning but you will be thankful later when the bills are regularly paid and you don’t have piled-up debts.
4. Use Cash More Often
Using credit cards or debit cards is easy, but it also makes you lose track of your money. You just swipe your card or enter your card number to pay for items without being completely aware of the amount you paid and how much money you have left. Paying your bills and purchasing items with the cash in your hands or in your wallet gives you a physical sense of how much you paid. You can see the number of banknotes decreasing and the money bulk thinning out.
The physical feel of paying money makes you more aware of your finances. It can be a pretty good idea to get your income in cash, or cashing it out from ATMs, and start physically dividing the money into the bills and expenses you need. When you’re done putting away the cash you need to pay, you will then be more aware of how much money you have left. It can even help you save money so you get out of your bankruptcy.
The most important thing you need to get out of your financial problems is to see the bright side of things. Money comes and goes, and everyone makes faulty financial decisions that lead to difficult consequences. The most important part is that you learn from your mistakes and make sure you don’t repeat them or replace them with new ones. It takes some work and a strong will to overcome bankruptcy and picking yourself back up, so don’t let your hard work go to waste by making big mistakes again.