What to Consider Before Filing for Credit Card Bankruptcy
Are you considering filing for credit card bankruptcy? You are not alone. Thousands of Americans have filed for bankruptcy at this point. This shouldn’t really come as a surprise, especially after what our economy has experienced. Bankruptcy is deemed by many as their only way out.
However, before you file for credit card bankruptcy, there are things that you might have missed which you might want to consider before you make up your mind.
Here’s what you should do to make certain that credit card bankruptcy is indeed your only way out:
Get a spreadsheet and write down all your monthly expenses, everything to the last dollar. These expenses should include all the basics; as well as the not so important items such as vacations, impulse shopping, and the like; and of course, a comprehensive list of your credit card bills and other loans. If there are unnecessary expenditures, take those out of the equation and see if you will be able to pay the minimum requirement of your credit card bills without them. If so, then you can still save yourself from credit card bankruptcy. Cutting down on movies, eating out, short recreational trips can be your simple way out of financial destruction.
Next, make a budget for the monthly expenses of necessities, including basics such as food, shelter, transportation and utilities. Take your mobile phone bills for example. In the past, people could live without cell phones, but right now it is understandable why people feel naked leaving the house without it. You don’t have to get rid of your cell phone, but you might want to look into reducing your monthly plan. Cable TV is also seen by many as a necessity but it is something that you can surely survive without. Paying for your credit card bills instead of cable TV will get you into a more stable financial situation in any angle you look at it. Simply put, reevaluate what you or your family think are necessary. Cut down or eliminate these expenses to be able to pay for your credit card bills and avoid credit card bankruptcy altogether.
Look through your possessions including your home, cars, or valuable items like jewelry or collectibles. You can avail of a loan using these as collateral to pay off your credit card bills or at least a portion of them. You can also sell them. Downgrading your kind of lifestyle is certainly a wiser and more practical decision than filing for credit card bankruptcy.
Credit card bankruptcy is often regarded as an easy way out of debt. However, be advised that doing so will have a very adverse effect to your credit standing which you will need to live with for a very long time. There’s also a social stigma that comes along with it. So before you make that decision, look over your other options thoroughly first.
