How To Avoid Your First Bankruptcy

At Bach Law Offices, Inc., our experienced lawyers have come to learn that most bankruptcies are avoidable and are often caused by people living beyond their means. This is why it is crucial to take the necessary steps that will help you avoid making financial mistakes that might force you to file for bankruptcy. Below, we give you four tips you should consider if you are struggling with debt.

Car Loan Debt

Although you might be enticed to splurge on a brand new car, most people who end up filing for bankruptcy have outstanding car payments. Instead of taking out a hefty loan to put a down payment on a new car, consider purchasing a used car. Drive the used car for a few years and save up enough money to eventually buy a nicer car.

Credit Card Debt

Along with car loans, credit card debt is another common way consumers rack up debt. The best way to avoid excessive credit card debt is to use cash for all of your purchases. This will save you money on late fees and you will likely start to spend less and less over time if you use cash for everything you buy.

Mortgage Debt

While most people dream of owning their own home, having a mortgage to pay for is usually not a part of this dream. We would recommend keeping your mortgage under 30% of your annual income. Anything more might cause you to fall into debt if a financial emergency arises.

Eat At Restaurants

Did you know that getting take-out every day for lunch can cost you roughly $2,500 a year? If you like coffee with your lunch, you’re probably spending closer to $4,000 a year. That’s enough to buy a reliable used car! Instead, start eating out as a treat to yourself, not a daily habit.

Do you have more questions about filing for bankruptcy? Call (847) 440-5998 to request your consultation with a member of our legal team. We are here to assist you today.