Few people look forward to declaring bankruptcy. Society sees those who declare bankruptcy as financial failures, despite the benevolent intentions of bankruptcy law.

Bankruptcy laws exist to help people secure a second chance after financial strife. During these stressful times, bankruptcy may seem inevitable. However, there are several things people can do to save their financial situation without filing for bankruptcy.

Before filing for bankruptcy, secure financial counseling

Before declaring bankruptcy in California, potential filers must take a credit counseling course with an approved counselor. This process will examine one’s income, expenses and debt to plan the fastest solution toward financial solvency. Many people may find these tactics help them recover from their financial woes without filing for bankruptcy.

Those serious about restoring their financial health will explore these options before bankruptcy:

  • Meet with a credit counselor: Credit counseling professionals are experts in the field of finance. Counselors will examine an individual’s income, expenses, debt, and liability before exploring paths forward. Clients will receive information on debt management programs and debt consolidation loans, as well as recommendations on what is best for them.
  • Draw up a strict budget: Most financial issues come from poor spending decisions and credit card debt. These situations do not usually require bankruptcy to fix, however. Many people may find that a strict budget can rein in debt and get finances under control. Even a temporary second job, though difficult, can help get ahead of creditors.
  • Debt settlement: Creditors do not want to miss out on money owed to them. Bankruptcy would forgive a lot of a person’s debt, removing the possibility of repayment. Debt settlement programs reduce monthly payments and curb interest rates, allowing people a clear and steady path out of catastrophic debt.

Bring questions to a lawyer

Those considering bankruptcy find more success with the help of a local attorney familiar with California’s bankruptcy laws. A lawyer can recommend credit counselors, work with the bankruptcy courts and help draft settlement paperwork.