Business Tips on How to Avoid Bankruptcy

Introduction• While there are some people who like to use bankruptcy as a

solution for their financial troubles, for most of us it is a last resort.

• Bankruptcy will allow you to dissolve your unsecured debts and start fresh, but it does have a way of lingering on your credit report for several years and it can be tough to get things back on track.

• If you find that your financial world is in trouble and you’re intent on avoiding bankruptcy, here are some useful tips to follow.

Selling Assets• If you’re staring the possibility of bankruptcy square in the

face, one thing you can do is create some cash flow to try and get yourself out of it. One way of doing that is by selling off some of your own assets.

• In many cases, people have plenty of unused items sitting around their own house that would help raise money to pay down debts.

Selling Assets• You may also want to consider ditching the extra cable

channels or some other services that aren’t totally necessary to save money toward your debts. Any other legal ways that you can boost the cash flow of the household should also be considered if you’re in trouble and avoiding bankruptcy is your overall goal.

Change Your Lifestyle• It’s never easy to make big changes to your lifestyle, especially

if you associate those things with being ‘ahead’ or ‘affluent’. However, if you really want to keep bankruptcy at bay, you must do these things and then take it all as a lesson for next time.

• If changing up elements of your lifestyle isn’t quite enough, you may want to choose an alternative to bankruptcy that still gets your finances and debt situation in order.

Options: Debt Consolidation• A couple of the more common bankruptcy alternatives that

people like to use are debt consolidation and consumer proposal.

• A debt consolidation is a loan that encompasses all of your different debts into one. You’re left with one amount to pay each month instead of several, and the new amount is usually less than the sum of all the others.

• You’ll also save money on interest over time with a consolidation.

Consumer Proposals• With a consumer proposal, a trustee works on your behalf to

make a deal with your creditors, where you pay back a portion of the debt you owe.

• Creditors negotiate with clients as a regular part of doing business, and they are even more likely to do so if they feel that you’re close to filing for bankruptcy. They know that in a bankruptcy they will get absolutely nothing, but with a proposal they’ll still get a percentage of what is owed.