The novel coronavirus has upended lives across the world in many ways— physically, emotionally, and financially.
At one point during the pandemic’s spread across the United States, unemployment reached levels not seen since the Great Depression. Despite various federal and state programs to relieve financial stress, many homeowners worry about being able to pay their mortgage and keep their homes.
But what do you do when the bank hounds you for payments you cannot make? And what if the worst does happen and you eventually lose the home and face bankruptcy? How can you rebuild from basically nothing?
Seek professional advice.
If you’ve declared bankruptcy, you’re going to need some help moving forward. You should start by researching local lawyers who specialize in bankruptcy. For instance, if you’re in the Louisville area, try entering the search terms “bankruptcy lawyers in Louisville KY” into Google. You will find experts, like Nick C. Thompson, who have a robust understanding of bankruptcy law. People like Thompson can help guide you on this difficult journey. This isn’t the time to hire an inexperienced attorney— you’ll want someone who can represent your interests while understanding the severity of your financial situation.
Cut costs and do comparison shopping.
Cutting costs is naturally the first step when creditors come calling or when you are just trying to maintain a semblance of the lifestyle you had when times were financially good. It may be an extra step, but a little bit of research can save you a lot in the long run.
However, there are some companies out there who will even do the price comparison work for you. Money gains can help you save dollars and find the best deals in the market. The company’s first product allows consumers to compare electricity prices ni. There is no fee to use the service, and all it takes is creating an account. There’s no reason you should be overpaying for basic services like utilities, so make sure you do your research and use price comparison tools like Moneygains.
Limit the use of debit and credit cards.
Credit cards are necessary for building and maintaining credit, but they can be dangerous if misused. Often, people still spend beyond their means with a credit card, which can quickly lead to growing debt and interest. When recovering from bankruptcy, you need to keep track of every single purchase you make, and credit cards make it easier to spend money and forget about it.
Even though debit cards are closer to cash, you can still swipe with abandon before realizing all of the money you’ve spent. Additionally, with checking accounts that are attached to savings, it’s simple to move money over from your savings when you want to make an unnecessary purchase. This is extremely dangerous for those of us needing to rebuild our finances. This is why it’s best to do a crash diet, where you use nothing but cash for anywhere from three to six months. Everything from groceries to gas should be paid for with cash. Actually seeing the money pass from your hands to another will make you think twice about needless spending. And, it may help you save simply by learning the value of a dollar.
Make some lifestyle changes.
Once you’ve hired a bankruptcy lawyer to help you with the fine print, and you’ve cut your basic costs and minimized your credit card use, you need to address your daily habits. The small purchases— like coffee and meals out— add up quickly. To really rebuild your finances, you need to sit down and add up these little costs to find out what you can cut.
Simple changes in day-to-day living habits can have a profound effect on your budget. Once you figure out what your spending habits are, you will have plenty of opportunities to cut down. However, that doesn’t mean you have to give up the things in life you enjoy all together! For instance, you could drop the fancy gym membership for exercise around the neighborhood or in your house. You could also try brown-bagging your lunch instead of eating out every day. Make these adjustments and the pennies saved will add up.
You don’t have to change your entire lifestyle to make a difference— start by changing one or two habits and witness what happens with your savings.