Why do people get bankrupt? Why is there a need of filing bankruptcy? The most common answer to these questions is spending unwisely and unnecessarily.
People often end up in bankruptcy because they are unable to pay their debts. Hence, they find it easy to file for bankruptcy as it helps them get free of their debts by just paying a minor fee.
Some people are too much in the habit of overspending that they have filed for bankruptcy more than once. The most common reason is that people do not have any control over their spending habits; they just spend on impulse.
Unnecessary purchases put us in deep debts. People, who do not plan out a budget, and spend without considering their income, mostly end up going bankrupt. But, this is not always the case. Sometimes, people get into the situation of bankruptcy because of sudden loss of job or may be because of the medical expenses.
Still, many people find it very good to file for bankruptcy to get out of the debt. It might relieve you for the moment. But, this is not a permanent solution to your problem. This would always be shown on your credit history for at least ten years.
You would always have problems in getting a job or even applying for a loan in the future, because bankruptcy keeps up showing on your credit history for minimum ten years. So, why not look for a more permanent solution; you can avoid being haunted by this curse for your life.
There is always more than one solution to a problem. It depends on your intention and your patience to decide which one you choose among them. Other solutions may take some time to get you out of the debt. Moreover, they would be a test of your patience. So, if you are looking for a solution that can kill the problem from its roots, instead of just covering it up, you can seek for debt consolidation. But, for this, you have to change your habits and make the payments on time.
Similarly, you have an option of Individual Voluntary Arrangement. In this process, an IVA practitioner makes an arrangement between you and your creditor to ward off your interest and make monthly payments for the remaining amount of your loan.
One thing you need to be sure of is that you should be able to make the monthly payments on time. If you do it, you would be relieved of your debt eventually.
For even more permanent changes, you need to change your habits. You should learn to draft a budget and stay within it. You must learn not to spend unnecessarily. Do not buy things that you can live without for a while. Cut down on your expenses. You can move to a smaller house so you have to pay less every month. Do not buy anything on impulse; impulse buying is what gets you more in debts and never lets you get out of it. Once you get adjusted to your new routine, you would see the difference yourself.
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