Income Tax Rates

Obtaining a bankruptcy discharge is well-known to be an easy process. For most debtors, the appeal of bankruptcy blinds them to the negative fallout of bankruptcy, not the least of which includes a bad credit score, difficulty finding new work, higher insurance premiums, and the fact that the public record of the bankruptcy is available for all to see. In most cases, all a debtor needs to do is devise a repayment plan by increasing income or, more likely, finding ways to reduce expenses.

There is a simpler way to repay debts and ensure you don't get into a debt mess again. Find ways to reduce expenses so you can work out an out of court settlement with your creditors. Remember, your credit card company or bank would rather have back some of the money they lent you than foreclose your property and spend more resources in finding buyers for it.

Because a lot of people are so attracted to the seemingly great benefits of bankruptcy, they do not bother with finding ways to reduce expenses. As a result, there is no introspection as to where the cash "leakage" occurs. Without knowing such a detail, bankruptcy will become the only available option rather just one of the options. Here are some areas where people can commonly reduce expenses.

-Stop using credit cards. Use a debit card instead. -Sit down and plan a budget for all expenses. There are many options available, but the point is to stick to it! -Save. Don't rely on loans to bail you out each time you need to buy something other than groceries. -If you need to borrow, borrow from family and friends who typically offer interest-free loans and no formal repayment requirements. -Instead of eating out, prepare your own meals. This can be fun and even romantic, thereby killing two birds with one stone. -Look for sales and bargains instead of going for high-cost name brands. -Don't change your lifestyle too much in one go. Introduce one change at a time if you are able to do so. -If you pay your family's expenses, you need to involve them in cost cutting measures. -Take stock of essential and non essential spending. Food, clothing, shelter, medical care, education are essential expenses. If you don't need a second car, a second home, or multiple credit cards consider getting rid of them. Use any profit to repay unsecured debt. -If your income does not cover all expenses, consider taking a second, part-time job until you are able to come out ahead again.

If you are already in debt, you can still deal with the situation by looking for ways to repay loans. By finding ways to reduce expenses, you can avoid the bankruptcy path and save your credit record. There is always debt management help available, you just need to look in the right places.