Avoid These Mistakes That Will Lead to Household Bankruptcy

Shannon Quinn - April 30, 2021
You should never miss a payment towards your bills. Credit: Shutterstock

3. Missing Payments Towards Your Creditors

One of the surest ways to guarantee ending up in bankruptcy is to stop paying towards your debt. Even if you only paid a tiny amount of money towards your debt each month, it shows that you were trying. Most of the time, credit card companies will not take you to court until you have failed to make any payment for months at a time.

Call the banks, credit cards, and loan companies to see if there is an option for a payment plan. Sometimes, they will allow you to have the payment reduced down to just the interest. Then, when you get back on your feet, you can go back to making higher payments again.

If you refuse to sell anything, it’s inching you closer to bankruptcy. Credit: Shutterstock

2. Refusing to Sell or Give Anything Up

If you’re in a difficult financial situation, one of the first things you can do is to sell your valuables. Nowadays, this is easier than ever. With apps like eBay, Depop, Facebook Marketplace, Mercari, Etsy, and Poshmark, you can sell almost anything if you have an Internet connection and a cellphone. Selling things you no longer need can be a good way to make some quick cash and pay a bill. Remember that some day, when finances get better, you can always buy that thing back. Holding on to your material things is not worth the shame, regret, and stress of declaring bankruptcy. 

I have been selling things on eBay since I was a teenager. Since this is such a big part of my life, it’s something that I talk to people about often. Whenever I met someone that was in a difficult financial situation, I would suggest that maybe they should sell something on eBay or Craigslist to get some emergency cash. I knew if they just listed their unused games online, they could earn $500 overnight and solve their problems. But for whatever reason, they refuse to let go of those things. Remember it’s just stuff. Usually, whenever I give something up in order to maintain my finances, it opens the door for something much better to replace it later.

Bankruptcy often happens because people avoid the issues. Credit: Shutterstock

1. Ignoring The Issue and Pretending It Will Go Away

Last but not least, you shouldn’t ignore your problems and pretend that it will somehow magically go away. I’ve met so many people who went bankrupt or were on the edge of bankruptcy because they totally ignored the reality of the situation. But if they had just faced the problem head-on and dealt with it, they could have maintained their finances.

Most of the time, this attitude comes from fear. If you feel so incredibly overwhelmed with financial problems, it’s easier to just pretend it’s not real. But trust me when I say that if you ignore the problem, it will only get worse. If you need advice, look at this guide on settling credit card debt from the FTC. There are so many options in place for you to make things right before you end up in bankruptcy court. All it takes is facing the issues early, before it gets out of hand.