Most people who run businesses in Canada understand that they not only need to file for bankruptcy when they are unable to keep up with their debts, but also when they do not have any savings in their accounts.
The worst part of bankruptcy filing is that even in your terrible financial situation, you will still need money to facilitate you through the process. This is the money required to pay the court fees and legal retainers.
So, in the face of such expenses, many businesses find it hard to save some money. However, this doesn’t have to be the case as there are ways through which you can save money during and even after bankruptcy.
Before going through the strategies, you need to consider, it is also important to understand that how you handle that little money even when you still have to file a bankruptcy will have a great impact to your financial status.
This is a point you should always have in your mind. Here is a look at the strategies you need to adopt if you wish to save money during bankruptcy.
Avoid paying your friends and family
You can save money during bankruptcy by not paying your friends and family. Most business owners find it a good idea to pay back people close to them.
But you need to know that all creditors are entitled to a proportionate share of the money available. The court will try to recover and redistribute funds paid to friends or relatives within a year of filing. So, it’s better not to pay them.
Avoid running up more debt
You can save money by not running up more debt, but also trying to get your clients to pay on time. So, keep off using credit cards, getting cash advances or transferring balances if you have decided to make the filling.
This is also not fair to your new creditors and the courts may not like it especially if the new debts are incurred within 90 days of filing.
Don’t waste money
This is normally the case when you are too caught up in the legal hassle that comes around when you file for bankruptcy. What normally happens during this time is that you spend more money than you can account for.
So, in spite of filing for bankruptcy, you should never forget to devise and follow a strict budget you think works for you.
These are financial trying times and sticking to this budget really helps you achieve a lot. During this time, make sure you minimize the luxuries you were used to until you get back on your feet again.
Maintain your savings account
You should never let go of your savings account during and after bankruptcy. This may not make sense to most people since this is the time debts are order of the day and saving is the last thing they can think of.
But whatever little you can put aside will always go a long way. This is why maintaining your savings account is imperative especially during your financial crisis. The more money you put aside, the better it gets for you during and after the bankruptcy process.
Keep off credit cards
When there is little left in your business and all you want to do is save some money, make a point to stay away from credit cards.
Of course, it goes without saying that when filing for bankruptcy you should start closing your credit card accounts.
Also, it only makes sense that once you are done with the bankruptcy proceeding, that you should try and avoid falling into debts again.
Buy things in bulk
If you still want to keep your business alive and save some money while at it, buy things in bulk if you can. Consider this a new life that has come after the bankruptcy. It should be your concern to do things just right from scratch. You mostly get things on discount if you buy them in bulk.
Do your own work
If you cannot do things on your own then it’s time you do some practice. Your business stands to make some extra money if you to do things by yourself. Don’t call for expert services to do things you would have done.
Sometimes saving during bankruptcy doesn’t have to be voluntary. As long as you save money at the end of the day.
So, in order to get yourself in the habit of saving regularly, you should think of the concept of forced savings. This will be your motivational factor.
This is simply referred to as the practice of setting up a system whereby there is a certain amount of money you must pay at the end of the day.
Whether you have enough money or not. Better still, the money can be automatically deducted from your checking account and transferred in a different account
And with that said, saving some money during bankruptcy should be easy. Brainstorm on the above strategies and work on them during and after filling bankruptcy. These strategies will help you save more within a short period of time. Also avoid some of the common mistakes people make when filing for bankruptcy.