If an individual really wants to avoid filing bankruptcy at all costs, the they should focus on being proactive with their finances. A good way to prevent this from happening is strict budgeting and not overextending themselves with credit. Many people these days get caught up living beyond their means with easy and fast available credit. Buy now and pay for it later seems like a good idea until the bills start coming in. A person can quickly find themselves buried under a mountain of debt. However, sometimes unforeseen circumstances occur that sends an individual’s finances into a tailspin. A job loss, accident, divorce, or major medical illness can be financially devastating to an already cash strapped person. At this point speaking with a financial advisor or a bankruptcy attorney is wise to evaluate one’s financial situation and determine what the best options are. Unfortunately many people choose to either bury their head in the sand hoping it will go away, or they get themselves into deeper debt by turning to payday loans or other means to borrow money to get them through.
At this point in one’s finances getting a payday loan might seem like a viable option to carry them through the rough patch, but it can actually make their financial situation even worse. Payday loans seem very easy to apply for and get but typically they come with very high interest rates. This can really hurt someone who is financially struggling because they may think that they are getting a good deal and getting bailed out, but it is actually hurting their credit even further and making it difficult to pay back as the loan will end up costing the individual more money than they realized to pay it back. This can easily lead to a viscous cycle of needing to borrow more money to meet the increasing financial obligations.
Seeking help with one’s finances before it gets to the point of utter financial disaster is of course the best option, but there is still hope for those that are drowning in debt. An experienced bankruptcy attorney can be invaluable. A bankruptcy attorney can carefully look at the individual’s financial situation and determine if filing bankruptcy is the best choice or if there are other alternatives that would best serve the individual. Finding help will alleviate a tremendous amount of stress and allow the person to see the light at the end of the tunnel.
The bottom line is, while filing bankruptcy should be a last resort, it can be incredibly liberating to be freed from the emotional devastation of debilitating debt. Once financial freedom has been achieved the individual should be wary not to make the same financial mistakes that got them into trouble in the first place. Sometimes people after their bankruptcy discharge are tempted to apply for a payday loan since money is tight and they don’t have any more credit cards. This may be tempting but it should be avoided at all costs. Offers for credit will soon come for those post bankruptcy filing and they will be able to rebuild their credit and enjoy a bright financial future.