Personal insolvency happens whenever a private individual owes more than he or she can pay to one or more creditors. It’s increasingly common in the nation’s current financial crisis. If you, a family member or friend find yourself facing insolvency, you’ve got plenty of company, unfortunately. In fact, despite the modest recovery in the economy this past year, experts predict a nearly 25% increase in the number of insolvencies that will be declared this year. That’s close to 40,000 people who will need to seek insolvency solutions for debt that’s gotten out of their control. If you are among them, what steps should be taken? Follow these 5 solutions to insolvency for a brighter tomorrow.
Admit the Problem
Face the fact that things have gotten beyond your control. Reality stares you in the face, so look it in the eye. Society may place stigma on out of control debt, but society as a whole actually faces more debt now than ever before. Our culture as a whole has to own up to its debt. We’re all in the same predicament, from the banks to the government to the guy who just got laid off. Admit this problem may be more than you can face on your own.
Prioritize Your Debts
Begin your biggest debt concentration with your secured creditors first. Be sure to save enough cash to meet your basic living expenses. Even unsecured creditors should be paid back at least a little bit. This makes a far better approach than concentrating on a few and stiffing the rest.
Consider Your Assets
Boats, cars, equipment and real estate can likely sell for more than you think. If debt resulted from overspending, consider listing the merchandise on Ebay and other sites. Anything that you sell should be put towards your biggest debt. You likely can recoup more of your purchases than you think.
Renegotiate and Reorganize
Discuss possible alternatives with your creditors. You most likely can work out some kind of deal. This could include stretched out payments, lower interest rates or even have part of the debt written off and forgiven. Work closely with a non-profit credit management agency. They can get you a lower interest rate on the condition of closing your credit cards, and help you work towards minimizing your debt.
Discuss Possible Solutions With an Insolvency Lawyer
You’ll be surprised at the solutions that are available to you. Discuss them with an insolvency lawyer. The future always lies ahead, so work today to make tomorrow a bright beginning by consulting your local Los Angeles bankruptcy attorney.