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There is a simple theory related to how to avoid bankruptcy. You should learn to live within your financial limits. You need not spend the money you don't have by using excessive credit. You should endeavor to maintain a monthly budget. Of course, the budget should be realistic.
It is a good idea to maintain a record of all your debts. It is not a difficult task with a little organization. If you have not taken appropriate steps towards financial health and are unable to pay your debt, then you may have to opt for bankruptcy. Bankruptcy is an important financial decision. It can affect you for years to come. You are urged to avoid bankruptcy if possible, thus avoiding some of the problems below.
1. If you choose to move in the next 10 years, you may have difficulty renting a house. It will be equally as tough for you get a home loan.
2. In any type of business, credibility is very important. After the announcement of your bankruptcy status, the credibility of your business will decline.
3. Electricity companies, phone companies or any other utility companies will hesitate to provide any sort of service to you for the very same reason... loss of credibility.
4. Speak to your creditors if your debts become a burden. You may be able to reach a compromise and avoid bankruptcy.
5. It is also possible that you own a house or have a retirement savings plan. In either case, you may be entitled to a debt consolidation loan. Seriously consider whether this type of loan may be of help to you and consult a professional financial planner or bankruptcy attorney.
6. There are many non-profit making agencies which can provide help to assist you in avoiding bankruptcy. They can create a plan which will take you out of the debt. Check out their online sites or consult your Yellow Pages for such organizations.