Just because you will be filing for bankruptcy, or if you have already filed for bankruptcy, does it give you the green light to spend like you used to before and accumulate massive amount of debt again? Hopefully your answer is no, and that you have learned your lesson from this painful and humiliating experience of having to file for bankruptcy protection. Since you have been through the financial hell, what should you do in the future to guarantee that you do not fall back into this kind of financial abyss again?
Create A Budget And Stick To It
This is easier said than done. Most people procrastinate doing a budget for many reasons. Some people just did not know what should be tracked and how and to track it, while other people are just plain ignorant that creating a budget is one of the smartest thing you can do in your life. Initially when you are creating a budget, track every single expense that you have down to the penny. Once you see a few months of expenses recorded, you can categorize these expenses into major categories in your budget. For example the line item for utilities expense can include water bill, garbage collection bill.
The idea behind a budget is to know every single expense you will be incurring. Once you know that, you will also know how much money you will be taking home each month, you will be able to tell if you have any surplus or if you are in the deficit. Ideally you will want your expenses to be much less than the money you are making monthly. If you see that you are spending more than you have (through the use of the credit card charges), you will need to find creative ways to reduce the expenses. By doing so, you can help yourself to avoid accumulating debt and in the long run avoid any chance of filing bankruptcy again.
Find Ways To Save Money
There are many creative ways to save money, depending on what expenses you are looking to reduce. For the purpose of this discussion, we will just concentrate on 2 things, food and entertainment.
Save money on food
Undoubtedly you have to buy groceries to feed yourself. Instead of buying the national brand name products, e.g. Kellogg’s Corn Flakes, buy the store or generic brand. Kellogg’s Corn Flakes can cost you over $5 for a box, but you can easily find a similar substitute by buying the store brand for less than $4, thus saving you $1+ in the process. Do not look at this $1+ as chump change as every little savings add up in the end. If you are looking to avoid being in debt, this is a good way to start because you do not want to find yourself facing bankruptcy again.
Save money on entertainment
If you are a patron of the movie theaters for that latest action movie or comedy, avoid paying the full price of admission. Ideally if you can wait for the movie to come out on DVD, that is the best way to save. But if you must see that latest blockbuster, then go to the matinee showing which is generally $2-$3 cheaper. Also avoid buying food from the concession stand, as the markup on the food is astronomical. If you need something to munch on, bring your own food. If you are looking for ways to cut back on your expenses and to avoid any chance of accumulating significant amount of debt and to stave off filing bankruptcy, then do everything you can to reduce or eliminate your expenses.
Use Cash If Possible
If you can change your spending habit to use only cash to buy anything that you need, that is a big step forward to becoming debt free. If you can only spend $x per month because you are only making $x month, you will never accumulate debt that you cannot handle. One of the biggest reason many people had to file for bankruptcy is because they are so used to charging their purchases on credit cards. If you can only spend what you have, then you will not find yourself with a big credit card bill at the end of the month and not being able to pay for it.
Be Smart About Your Money Post Bankruptcy
These are just some of the ways you should look into to save some money. Remember the old saying “a penny saved is a penny earned”. You should know by now how easy it is to amass a lot of debt in a short time, and eventually find yourself in so much debt that your only option is to file for bankruptcy protection. Learn from your previous experience and start your life anew and do not accumulate too much debt in the future.
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Many people feel embarrass and shameful when they had to file for bankruptcy protection. They believe that the society will mock and ridicule them for their financial woes, and that is the reason why those people will do everything to keep this bankruptcy filing a secret. Even though no one in his or her right mind would ever want to file bankruptcy, lift your chin up and keep your spirits on high because it is almost always done out of necessity. So if you are one of those who had to file bankruptcy because of the enormous debt you have accumulated over the years, do not let it depress you too much. You might wonder if your employer has a legitimate reason to fire you if and when they find out that you have declared bankruptcy.
Just to keep your mind at ease, there is no legal precedent to indicate that an employer can fire you just because you have filed for bankruptcy protection. There might be special circumstances when an employer can justify letting you go because you had to seek for legal protection when you are in some serious financial abyss. An example of such can be when you have signed an employment agreement that you will have pristine financial records. In such situation, the employer has the option terminate your employment because you have broken the legal binding agreement to be financially sound. Otherwise, there is absolutely no legal reason for any employer to fire you because of your financial plight.
On the other hand, if you are looking for a job in this though economic times, it can mean a different story. Some employers will perform a criminal and financial background check on you. Even though employers cannot outright reject your employment with the company based on your bankrupt status, the employers have many options to reject your application without any justification. For example, if there are 5 equally qualified people (including yourself) vying for the same position. When the employer runs the financial background check on all the applicants, your report will subsequently indicate that you have file bankruptcy in the past. There is a higher possibility that this employer will offer the open position to one of the other 4 applicant.
When To File Bankruptcy
If you do find yourself unemployed right after your employer finds out about your bankruptcy filing, consult an employment lawyer, and possibly also a bankruptcy lawyer. You need legal representation if you are going to challenge your employment status. Do not get despaired if you had to file bankruptcy protection. Be positive and believe that filing bankruptcy can only help you in the long run financially.
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It is your legal right living in the US that you can file for bankruptcy protection if you are facing extreme financial difficulty. If you find yourself in a lot of debt, whether you are an average income earner (making $30,000, or less than that for that matter), or if you are one of the top echelon million dollar income earner, you are still protected under the same set of bankruptcy law observed by the US bankruptcy law. The bankruptcy law does not discriminate one based your basic First Amendment Rights, or anything related to how much you earn, or how much you owe to various creditors. As long as you can proof to the bankruptcy court that your circumstance for filing bankruptcy is legitimate, just about everyone can apply for the bankruptcy petition.
It also does not matter to the bankruptcy court if you have $1,000 in debt, of if you are $1M in debt. If you can substantiate to the bankruptcy court that you are unable to pay off this debt, and it is petitioned legally through the bankruptcy documents, just about anyone can exercise his or her civil right to file for bankruptcy. Look at some of the richest millionaires in this society, for example boxer Mike Tyson, singer Toni Braxton and even real estate tycoon Donald Trump, they all at one point in their career had to succumb to filing bankruptcy protection.
The only determining factor for filing bankruptcy is your ability to pay off the amount you owe, and not how much you make per year, or how much you owe in total. Do not let outside forces influence your thinking. You should not feel embarrassed if you need to file for bankruptcy. Would you rather let your pride stand in the way of a better financial future? Would you rather be in heavy debt for the rest of your life just so that you can say you had never filed for bankruptcy? Be rest assured that legally anyone will be allowed to file for bankruptcy protection, as long as it not done willfully to break the law. You cannot knowingly buying expensive items on credit cards, or take out thousands of dollars from cash advance of the credit card, all the time knowing you have no way to pay for it because you want all the debt discharged once you have filed for bankruptcy protection. That is the ultimate power of the bankruptcy process, the ability for you to wipe away most, if not all, of your outstanding debt hence giving you a chance to start out with a clean slate.
Filing Bankruptcy Is For Everyone Under The US Law
You should not question if you are eligible to file for bankruptcy protection, but you should really question if you need to file bankruptcy or not? Filing bankruptcy is a life changing event and should be taken lightly. You need to consider all the advantages and disadvantages of this consequence. If you do not know what is involved and what to expect in a bankruptcy process, then you should look for the advice of a qualified bankruptcy lawyer. A local bankruptcy lawyer should be able to answer all your worries and concern regarding such a life altering event.
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