No one ever plans to go bankrupt. It’s usually something that occurs after a life changing event in a person’s life whichhas caused their income to drop, their bills to rise or both. Here are some measures you can take that can help save you from bankruptcy.
Unpaid bills are often a major contributor to why people end up declaring bankruptcy. Make sure you prioritise what needs to be paid most urgently and ensure those creditors are satisfied. Having numerous creditors calling you for money can become very overwhelming and often leads to a downward spiral.
Bankruptcy is actually split up into two periods. The ‘undischarged bankruptcy’ period which lasts for 3 years, during which time as per the Bankruptcy Act, restrictions apply; and the ‘discharged bankruptcy’ period which last for a further 2 years where no restrictions apply.
The biggest mistake people make when they have debts is ignoring calls from their creditors. This only compounds the problem and makes things even worse. You should always keep the lines of communication open and attempt to come to a mutually satisfying agreement such as a payment plan or extension period.
One of the best things you can do for yourself is to prioritise saving. Think of saving the same way you would think of a payment obligation you were required to meet and ensure you are always contributing towards it. Your savings will become a safety net that could save you from bankruptcy.
If you feel you are already in too deep and are unsure of what to do, seek advice from a professional who can give you the right help and support.