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Your debts are too high. You can't make all of your
payments, but you don't want to go bankrupt.
You want an alternative to bankruptcy that will help
you deal with your debts. What is the best bankruptcy
alternative?
The answer is simple: fix it yourself. How? Start with a plan.
If you were going to build a house, you would make
a plan. You would make a list of everything you needed
to build the house; you would figure out what it would
cost; and then you would build the house.
Finding an alternative to bankruptcy is done in exactly
the same way. You start with a plan, called a budget.
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Don't stop reading! The word budget can be
intimidating, but it isn't! A budget is simply a list
of all of the money that comes into your house each
month, and all of the money that goes out.
To make a budget, get a piece of paper and start
writing. Or, do it on your computer with personal budgeting software. You can use our Excel
Spreadsheet Personal Budget Template or download
our Adobe
pdf personal budget if you want to do it on paper.
If this is the first time you have tried to make
a personal budget, you may have trouble figuring out
what you spend each month. |
You could start by looking
at your bank statements and credit card statements
for the last few months to get an idea of your average
monthly spending. Or, carry a pencil and piece of
paper or notebook with you for the next two weeks
and record everything you spend money on. That will
help you determine your monthly expenses.
The most important budget secret: Keep It Simple!
You can read all sorts of books on budgeting. You
can take courses. But the one element to remember,
above all else, is keep it simple. Don't try
to design the world's most complicated Personal
Budget Spreadsheet. Try to design something simple.
If you get paid each week, have a sheet of paper
for each week. At the top put the amount of your paycheck,
then list everything you will spend money on this
week. That's a budget! And that's simple!
Once you know what you spend money on, you can take
steps to reduce your expenses. You could try cutting
your food bill, taking the bus instead of driving,
making your own coffee instead of going to the coffee
shop, or switching to basic cable. If you can save
some cash each month, you can use that cash to repay
your debts.
If you have the cash, the Do It Yourself approach
is your best bankruptcy alternative.
If your budget shows that you can't afford to do
it yourself, you need to look at other bankruptcy
alternatives, such as debt
consolidation, credit
counseling, Chapter
13 Wage Earner Plan, consumer
proposal or if all else fails, personal
bankruptcy.
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