It’s been a month since you made the resolution to reduce your debt and improve your finances, but you should be careful so you don’t put yourself into a situation where you could become worse off and have to file for bankruptcy.

Families seem to get into trouble when they think their situation can be done with a quick fix. While on the surface, it may help your situation temporarily, in the long run, it could hurt you. Making the decision to improve your finances is not easy. It takes discipline, determination and hard work.

To help you continue to improve your financial outlook you should consider the following:

  • Work from a detailed budget.
  • Find areas where you can cut more spending and put that money towards an unpaid bill.
  • Once you have paid off a credit card, keep the account open, but don’t charge it up again.
  • Beware of short-term loans. According to the Consumer Federation of America, you could pay triple digit interest rates, and still struggle to pay back the loan, putting yourself at risk of falling more behind.
  • Considering taking on a second job to help pay down those debts.
  • If you need to borrow money, consider borrowing from family or a friend.
  • It might be tempting to apply for a new line of credit, but don’t do it. It will only increase your debt over time and you may not be able to afford the monthly payments long-term.
  • If you are struggling with monthly credit card payments, call the credit card company and work out a payback program. In some instances, they may be able to reduce your interest rate, eliminate fees or postpone your payment due dates.

If you find yourself in the situation that bankruptcy may be your only alternative, your best bet is to speak to a qualified bankruptcy attorney. They can help you figure out what your options are and layout a plan that will best fit your needs. You could give yourself a fresh start by filing for bankruptcy, but you still need to follow a disciplined approach when it comes to your finances so that you can continue to rebuild a healthy financial future.

Source: Fox Business, “5 financial Band-Aids that can make the bleeding worse,” Doresa Banning, Jan. 29, 2012