Avoiding Bankruptcy - Information

Welcome to the avoiding bankruptcy page. We provide information on how to avoid going bankrupt or filing for chapter 11, and whom to turn to for help. These pages provide you with valuable options on where to get advice and how to take the right steps to avoid or get out of bankruptcy.

Bankruptcy is a legal process available for people who need protection from their creditors - including mortgage lenders, auto lenders, and credit card lenders. We all know what it is like to get behind on your payments. Sometimes it's just not possible to catch up - you may have lost a job, gotten divorced, had a medical problem or an accident, have an adjustable rate mortgage that went too high, or just got too far into credit card debt - bankruptcy often feels like the only solution.

This page tells you how to avoid bankruptcy if you are in credit trouble. keep reading...

It is possible to avoid bankruptcy! You should try your hardest to stay out of bankruptcy, even if that means dealing with difficult creditors and moving in with family or friends. The negative effects of a bankruptcy mean you won't be able to get a home or car loan, will have a difficult time getting some types of jobs, won't be able to get a credit card or cell phone - the list of hassles and pains goes on and on! You can use the resources available here at SeekFunds.com to get help and avoid going into bankruptcy. Seek help and advice as soon as possible - don't wait before it's too late!

How Not to Go Bankrupt - How to Avoid Bankruptcy

The three most important factors to avoiding bankruptcy are: 1) Manage your finances wisely and avoid debt, 2) Maintain proper insurance to avoid catastrophic expenses in the event of an accident, and 3) Seek help early if you find yourself over your head in debt.

The first factor in avoiding bankruptcy is to manage your finances wisely. The first thing you need to do is determine what is a "need" (food, housing, transportation, clothing, medical insurance) and what is a "want" (vacation trips, shopping sprees, a new flat screen TV, nights on the town, a new car or cell phone). Segment everything you buy into those two categories, then avoid buying anything on the "want" list for awhile. Next, add up your total take home income (after taxes) for the month and subtract your housing cost (rent or mortgage plus utilities). If your housing costs are higher than 70% of your total take-home income, then get a higher paying job, a second job, or a roomate. Finally, avoid borrowing money at all costs - that includes credit cards with 0% interest "teasers", adjustable rate mortgages, student loans, etc. Adding more debt just doesn't work, even if it seems like the right thing to get temporary relief.

The second factor in avoiding bankruptcy is proper insurance. Insurance is NOT a "want" because it protects you against financial catastrophe in the event of an accident or major life event. Medical insurance is the #1 thing that can protect you and your family's finances these days! Auto (always) and Home Casualty insurance (if you own your home) is a necessity because in the event of a wreck, fire, earthquake, flood, or hurricane you will not be stuck with a destroyed car or home but still paying the auto loan or mortgage.

Seeking help early is the third major factor in avoiding bankruptcy. Believe it or not, your creditors DO NOT WANT YOU TO GO BANKRUPT! It costs them far more to recover a small amount from a borrower that goes bankrupt than it does to be patient and work with you. If you are finding it hard or impossible to make your payments, the first step is to call your lender and tell them BEFORE it becomes a major problem. Most credit card, auto, and mortgage lenders have programs to help people make their payments. They will give you a break on your payments for a few months and even reduce your rates temporarily if you call them early and tell them you honestly intend to pay them back. If this doesn't work (and it should), your next step is to contact one of our bankruptcy resources listed above and on the rest of our site - including credit counseling, debt consolidation services, and credit assistance services. You will be happy you did because they can really help you!