Consider these three easy ways to avoid bankruptcy in a recession

According to studies, lost one in 10 homeowners their homes in the past several months. Due to increase in a recession more people who risk losing their jobs, people will not only lose their homes, some of them also go bankrupt. Fortunately, there are ways to avoid bankruptcy during the recession. To avoid bankruptcy and bring your credit score, here's what you can do. 

Avoid bankruptcy: Live Within Your Means

Many people go bankrupt because they continue to spend money that they have not. These people borrow from banks, credit card companies and other financial institutions, without really caring how they want their debt in the near future. People who spend more than that means will find themselves in deep financial difficulties in the long run. To avoid bankruptcy, you should learn to live within your means. In other words, if you earn about a hundred dollars a day, you should not spend more than the kind of money in one day. A rule of thumb, you should allocate at least 30 percent of your income as savings. You should save a portion of your earning even if you earn only small amounts of money each day. You have to build a financial nest, no matter how small to avoid bankruptcy during a recession. 

Save on Overhead Cost

You must save your indirect costs to avoid bankruptcy in difficult times. Gone are the days when we have the luxury to spend a lot of money on overheads. If you have a large home and you are having trouble meeting your daily overhead costs, you should consider moving to a smaller home and save some money. There is really no reason to keep a very large house, if you can not afford to run it. You do not need all that space for yourself, so there's really no reason to live inside a large house. Now, if you can not bear the thought of selling your home and move to a smaller to save money, the best thing to do is to rent a portion of your home. If you have a basement, you're not using at all, think about renting the space. This was you can save some costs and make money at the same time. 

Learn To Negotiate 

If you want to avoid a bankruptcy, you have to learn to negotiate with your creditors. Do not let the bills pile up without doing anything. Ask for a grace period from your creditors if you are able to pay your bills on time.