How to avoid bankruptcy

Perhaps you are used on quite decent and organized living from you income and control your expenses. However, when the balance of family income and expenditure is disrupted, not everyone can immediately learn how to react in the right way. This is nothing shameful or bad is not to ask for help; from friends, experts, literature…

Our advice is a small guide to coping with the crisis, so if you already use most of these tips, reconsider them again, since they  bring a new ideas, maybe just what you need for additional savings …

Check your income -outcome ratio

The first step is to check whether your monthly expenses exceed your revenues. The best method is to make a table of revenue and expenditure – all put on paper, or in the “Excel” spreadsheet. If you are still in the “green” zone, add increasing annual costs to that excess income; summer and winter, children’s tours, car and other insurance and membership fees for various activities and cards. Plan the means of financing and then double-check if you are really “safe”.

Refinancing and delaying

If you lost or your partner had lost a job, personal or family income is to reduce or even completely dry up and especially if you are in charge of credit, it does not necessarily have to mean that you must immediately sink into bankruptcy. Visit your biggest creditors (that’s probably a bank) and see if you can get a grace period (if you lost your job) or rescheduling of loans (if you have income reduction) with a lower rate. For that you will have to pay, but this it is much better option than the termination of payment, blocking wages, enforcement or – staying homeless.

Change “the nature“ of your debt

Try to convert into the long-term short-term loans and credit-card debts; interest rates are lower and the rate is less. If you do not have a classic loan, but you have a large debt on credit cards or revolving debt, try to raise a loan with a lower interest rate.

Check the interest rate

The best thing would be to pay the more expensive debts first. If you are already in delay with payments, first pay off the debt with a higher price tag. The most expensive loan or debts pay first, for their assignment will grow fastest. If you have to postpone some of the bills, postpone ones with a lower interest rate.

Check who will suspend delivery first

Not all service providers are equally timely. When it comes to utility debts, consider which supplier is the most rigid. This will determine the priority list when paying.

Reconsider the “smart investment” in this period

The things that seemed like a smart investment, in crisis situations become a luxury. You do not necessarily have to interrupt a life insurance policy or home insurance to, it is often not worth it, but you can also arrange a temporary freeze.

Reconsider your expenses

Maybe you think that you have given up too much, but think about it twice if it’s worth to use public transportation to work rather you own car, or you can bring prepared food in the gym instead of ordering an expensive one. Instead of buying gifts, make something yourself. Your friends and family will understand, and the gift that you create has a greater emotional value than the one you buy.

How many credit cards do you really need?

You do not have to have a credit card in every bank. As soon as their membership fee expire you’ve already paid for it, lose the card you do not need. But keep one card for emergencies.

Taxes

Switch tax deductions for children and dependents to a spouse who has a higher salary, trust us, it worth it. Although you can do if you are reporting income tax, it is better to take advantage of this option on a monthly basis. The money is worth more now than later.

Additional earnings

Each of additional revenues sure is a blessing. You can translate, revise, write professional articles, train, give instruction in some subjects, or whatever you know. Sewing for you and your family, baking, babysitting or helping with housework … all can help to survive when the crisis knocks on the door.

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