For many Americans, debt is a way of life. When that debt continues to pile up, many people think that filing for bankruptcy is the only way to solve their financial problems. While bankruptcy can definitely help erase debts and start you on a fresh path,  it’s not always your only option. Many times, your financial situation might not be as hopeless as you think it is.

You should start by looking at your overall debt situation and assessing the status. If you’re not too far gone yet, these four tips can help you reduce your debt load and avoid bankruptcy. They’ll take time and dedication, but with some patience and hard work, you’ll be able to climb out of your financial hole and start over again.

1. Don’t add any more debt

When your debt spirals to the point where you can no longer pay it off, bankruptcy becomes your only option. The trick is to stop the downward spiral before it’s too late. Don’t add any more debt to your current load – no new loans, no new credit cards… nothing. If you need extra money, consider selling a few minor assets instead of taking out a loan or opening a new credit card.

2. Start saving money immediately

Most people get into financial trouble because they’re spending more money than they can afford to spend. Take a long hard look at your spending habits, and if you’re living outside of your means, stop immediately. Simply reducing your monthly expenditures so that you can save money will be a huge step toward financial recovery.

Credit card debt is the big villain in this area. Because credit cards allow you to spend money you don’t have, it’s easy to lose track and become overwhelmed. Stop using your credit cards and only buy things that you actually have cash to pay for, or that are absolutely necessary. Make it a goal to save a certain amount every month, and use that money to start paying off your debt.

3. Make a plan and stick to it

Another huge contributor to overwhelming debt is spending money without a financial plan in place. You should sit down and map out your monthly expenses compared to what you earn. Figure out where you can make reductions in what you spend, and create a plan for how you’ll reduce your debts. A solid financial plan with all of your income and expenses can also help if you’re trying to negotiate with creditors, since they’ll have a clear picture of your financial situation.

4. Talk to your creditors

Take your detailed financial plant and show it to your creditors. If you can convince them that you’re doing whatever you possibly can to pay off your debts, they’ll often be willing to work with you. Find out if they can reduce your monthly required payments, your interest rates, or your fees. Remember – it’s in their best interest to work with you, because they’ve got a lot to lose if you declare bankruptcy.

If you’ve got more questions about finking for bankruptcy or your financial situation, please call us at 214-760-7777 for a free consultation. You’ll talk directly with Mark, and he’ll take the time to walk you through all of your options.