Have you already filed for bankruptcy? If so, there is a 1 in 3 chance that you will file for bankruptcy at some point in the future, according to 2011 bankruptcy statistics compiled and published by the U.S. courts. Whether you have recently filed for bankruptcy, are currently taking steps to recover from bankruptcy or your previous bankruptcy was years ago, knowing what you can do to prevent having to file for bankruptcy again in the future is crucial to your financial – and possibly mental – health.
Tips for Preventing Future Bankruptcies
One of the main catalysts for people filing for bankruptcy is medical expenses; as a result, investing in medical insurance and healthcare coverage, if and when possible, is one way to possibly minimize potential medical bills. This often happens when you or a loved one suffer an accident that requires surgery or other expensive medical care.
Another way to reduce the chances of having to file for bankruptcy in future is to start building a savings cushion for the cliché but inevitable rainy day. Even if you are not able to put large sums of money away, consider cutting back on the fancy coffee drinks, going to the movies or other frivolous expenditures so that you can put even a few dollars into savings each day. This can really add up and save in you when you need to pay for something that is essential and costly!
Other helpful things you can do in an effort to reduce the chance that you will be saddled with debt and forced to file for bankruptcy include paying attention to your debt ratio (with the goal of having your monthly debt obligations be no more than 20 percent of your income), paying more than the minimum payments on credit cards, and when necessary, working with creditors to settle debts for less than what you may owe.
Being attentive to what you spend can prevent your debt from snowballing and forcing you to have to file for bankruptcy.