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Contact the Law Offices of James Scott Farrin 1-866-900-7078

What You Can Do to Prevent Future Bankruptcies

What you can do to prevent bankruptcy

No one ever wants to be in a position where they have to consider filing for bankruptcy, and most do so only as a measure of last resort. However, according to the U.S. Courts, those who file for bankruptcy have a 1 in 3 chance of filing again.

Though bankruptcy may be your best option for debt relief it's safe to say that no one wants to wind up in the same position having to consider bankruptcy because they are facing seemingly insurmountable debts and creditor harassment. Fortunately, there are many things you can do to reduce the likelihood of filing for bankruptcy for a second time. Here are a few ideas for how you can prevent future bankruptcies:

Set a Realistic Budget

It is important to have a realistic sense of your finances in order to avoid taking on debts that may lead to your needing to file bankruptcy. Make a list of all your expenses -- not just the ones you hope to limit yourself to, such as rent and utilities. If you know you won't be able to stop eating out or going to the movies, make sure you budget a line item for these things and then limit the number of outings you have to save.

When calculating your budget, also be sure you have realistic expectations about your income. Set your budget based on your current income -- not what you hope to be making after an expected promotion or bonus (which may never come).

Create an Emergency Savings Fund

The unexpected can happen, and it's usually what leads to situations that cause you to consider bankruptcy. Many people have lost their jobs in this economy -- jobs they have held for years. Others have been sidelined by unexpected medical bills after an illness or injury. Some face having to start over after a divorce.

While you can't prepare for every possibility, you can create an emergency savings fund that will provide a cushion when the unexpected happens. Aim to save enough to cover at least six months of your salary.

Be Cautious with Credit

Many people who file for bankruptcy have high credit card debts. Sometimes the credit card debt is the cause of the financial struggle that led to filing bankruptcy. Sometimes, other overwhelming financial circumstances have led to the need to use credit in order to cover basic living expenses.

Once you start to accumulate a lot of credit card debt, it can be difficult to pay it off as high interest rates compound the debt. Reserve credit card use for emergencies only or limit their use to purchases for which you have the cash ready to pay off at the end of the month.

Get Good Insurance

A major illness or injury is one of the common reasons that people find themselves in over their heads in debt and considering bankruptcy. While you can never protect yourself against all possibilities, you can reduce your risks by getting a good insurance policy that will pay your medical expenses if you are injured or become ill.

Insurance won't protect you against all losses. Depending on circumstances and your policy, you may not be covered for lost wages, long-term disability, or even all of your medical care. However, having a good insurance policy will minimize your losses and protect you from dire financial circumstances.

The unexpected happens, and bad things happen to good people. You can't insure that you won't ever have to face overwhelming debts. However, you can take steps to minimize your risks so that if you've already had to file for bankruptcy, you can reduce your chances that you will have to file again.

Of course, if you are unsure about your options, you can always call a North Carolina bankruptcy lawyer at the Law Offices of James Scott Farrin to review your case and get tailored legal advice. Call 1-866-900-7078 right now for a free evaluation of your case!

Contact Information

Raleigh Law Office

5848-100 Faringdon Place
Raleigh, NC 27609
Phone: 919-834-1184
Toll Free: 1-866-900-7078

Durham Law Office

280 South Mangum Street, Suite 400
Durham, NC 27701
Phone: 919-688-4991
Fax: 800-716-7881

Fayetteville Law Office

517 Owen Drive
Fayetteville, NC 28304
Phone: 910-488-0611
Toll Free: 1-866-900-7078

Charlotte Law Office

1001 Morehead Square Drive, Suite 350
Charlotte, NC 28203
Phone: 704-599-1078
Toll Free: 1-866-900-7078

New Bern Law Office

1505 South Glenburnie Rd, Unit P
New Bern, NC 28562
Phone: 252-634-9010
Toll Free: 1-866-780-3422

Greenville Law Office

702 G Cromwell Dr.
Greenville, NC 27858
Phone: 252-355-5205
Toll Free: 1-866-780-3227

Greensboro Law Office

300 N. Greene Street, Suite 850
Greensboro, North Carolina 27401
Phone: 336-665-7072
Toll Free: 1-866-900-7078

Goldsboro Law Office

214 South William Street, Suite 3
Goldsboro, NC 27530
Phone: (919)-731-2581
Toll Free: 1-866-900-7078

Henderson Law Office

514 Dabney Drive, Suite 200
Henderson, NC 27536
Phone: 252-492-4600
Toll Free: 1-866-900-7078

Roanoke Rapids Law Office

709 Julian R. Allsbrook Highway
Roanoke Rapids, NC 27870
Phone: 252-537-9670
Toll Free: 1-866-900-7078

Rocky Mount Law Office

3202 Sunset Avenue, Suite B
Rocky Mount, NC 27804
Phone: 252-937-4730
Toll Free: 1-866-900-7078

Sanford Law Office

703-B South Horner Boulevard
Sanford, NC 27330
Phone: 919-775-1564
Toll Free: 1-866-900-7078

Wilson Law Office

2315 Airport Blvd Suite A
Wilson, North Carolina 27896
Phone: 252-246-9090
Toll Free: 1-866-900-7078

Winston-Salem Law Office

301 N. Main Street, Suite 2409-C
Winston-Salem, NC 27101
Toll Free: 1-866-900-7078