No one goes through life expecting to file bankruptcy.
However, it happens for some consumers. Whether it is a medical emergency, job loss, or another incident that forces you to fall behind and eventually seek help from the courts, bankruptcy is there for consumers who cannot satisfy obligations.
Unfortunately, some consumers end up filing bankruptcy a second time. Sometimes it is from unforeseen events, a series of bad decisions, or not managing debt properly. Regardless, filing bankruptcy for the second time is not advised and harder to re-do in the future — especially if you seek a second Chapter 7 bankruptcy.
It is best to do what you can to avoid filing for bankruptcy. Not only will it prevent you from harming your credit history, but also avoid the long-term ramifications of filing for the second time.
Prevent Getting into Financial Distress the First Time
Whether you file Chapter 7 or Chapter 13 bankruptcy, it is recommended that you take credit and financial counseling.
In addition to the court-ordered courses, you can help prevent future financial problems by taking additional financial education, budgeting, and money management classes.
Some ways you can avoid finding yourself behind and in need of filing for bankruptcy again include:
- Be proactive with your budget. Review your income and necessary expenses. See what expenses are unnecessary in your budget. Then, set aside money each month for savings. Savings protects you in the event you become unemployed, have a medical emergency, or another cause leaves you short on funds.
- Avoid credit cards. Credit cards are a leading cause of consumer debt. They are tempting to use and run up to their limits quickly. Then, you find yourself playing the age-old battle of credit card minimums and compounding interest. It is best to avoid credit cards altogether. Have some for emergencies, but never buy something you cannot purchase with cash.
- Avoid taking advances on your paycheck. If you find yourself taking out payday loans or advances from your employer on your check, you are living beyond your means. Now is the time to stop the vicious cycle, find where you are overspending, and halt the process.
What to do When You are in Financial Distress, but Still Want to Avoid Bankruptcy
Sometimes financial issues creep up even with pre-planning. When you find yourself in financial distress, but did not want to file a second bankruptcy, you still have options.
These options include:
- Finding a way to increase income (even temporarily). Increase your income, even temporarily, with a second job, overtime shifts, or by making money from your hobby.
- Talk to family and friends. Sometimes you must turn to family and friends when you find yourself struggling financially. While no one wants the pressure of borrowing money, sometimes asking to borrow money is better than filing bankruptcy.
If Bankruptcy is Your Only Option, Contact an Attorney
When you decide bankruptcy is the only option, whether for your first time filing or second, speak with a lawyer that has extensive experience handling consumer bankruptcy.
The attorneys at Hames, Anderson, Whitlow & O’Leary, can help identify if bankruptcy is right for you, but also which form of bankruptcy is best given your financial situation.
Sit down with one of our attorneys today to explore your options. We offer no-obligation consultations. You can reach our offices for your appointment at 509-586-7797 or ask a bankruptcy question online.