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You've Got Twenty Days Before You Go Bankrupt: What Do You Do?

no money, empty pockets

In the West, we’ve gotten used to the idea of constantly being in debt. It wasn't always this way, but thanks to a lack of savings, low-interest rates and the pressure to keep up with the neighbors, it’s how things have turned out. 

Being in debt can put downward pressure on your credit score. But going bankrupt can be even worse. In fact, bankruptcy is equivalent to putting your hands up and saying to your creditors that you probably can’t ever pay them back - as good a reason as any for them to refuse to lend to you. 

The good news is that even if you’ve only got 20 days before you go bankrupt, there’s a lot that you can do to dig yourself out of a hole and protect your credit score. 

Reach Out To Friends And Family 

Borrowing from friends and family is usually considered a bad idea. But going bankrupt is often worse, thanks to the fact that it puts so many restrictions on your life - like not being allowed to get a mortgage or start a company. Your friends will want to know how you plan to repay them in the future, so instead of just asking, it’s a good idea to have a sort of “business plan” to show them. Give them the raw data and get them to make up their minds as to whether or not to bail you out. If you’re pursuing something that really could make you a lot of money in the future, many people will give you the benefit of the doubt. 

Negotiate With Creditors 

Believe it or not, considering bankruptcy actually gives you a lot of negotiating power with your creditors. If you declare bankruptcy, creditors will not get any of the money they’re owed, and so it’s something they want to avoid at all costs. Often they’re willing to accept partial payments if it’s clear to them that you’re not calling their bluff. 

The advice site Repair.Credit says that it’s always best to be honest about your hardship. Show your creditors that, given your current circumstances, it’s impossible for you to pay back all the money you owe. Often you’re able to negotiate lower interest rates or a reduction in the principal. Some creditors may even write off a loan if you’ve paid sufficient money back in interest. 

Sell, Sell, Sell


Bankruptcy isn’t something you want on your record. As such, it’s a good idea to dig into your assets first and try to climb your way out. Think about it: how did you get into debt? Often it’s because you converted borrowed cash into assets, like cars, furniture, and electronics. To get out of debt, all you need to do is reverse this process. Sure, you won’t get all the money back, but you will get some of it, and that could be enough to save your finances. 

Get A Second Job On The Side 

Finally, consider getting a second job on the side at the weekends on in the evenings. Flexible jobs, like internet-based work, can be done around your usual chores and activities.

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