If you are drowning in debt, you might still be able to get control of your situation without filing for bankruptcy relief. There are many stories about people who have been able to tighten their belts, work harder, and have found a way to repay creditors over time. Especially if your debt problems were caused by overspending or a short-term problem like unemployment or an illness, you may find these suggestions for improving your financial situation to be helpful.

Budgeting

Making a budget and sticking to it can be very helpful, for many reasons. Many of us never learned how to make a simple budget, but it's not too late. A budget need not be overly complicated or detailed. The most important thing to keep in mind is to be honest with yourself most of us tend to overestimate how much we earn, and underestimate how much we spend. A budget can help you stay on track, and to spend less than your earn; maybe you can even save a little for the next emergency.

A sample budget form is provided on this website to help you make a budget (Download Budget Form). If you are planning to file a bankruptcy, you will still need to fill out worksheets for both your income and your monthly expenses, and those can be found here.In order to file bankruptcy, you will need to provide accurate information about your income and expenses for the six months prior to filing.

Start by writing down all your income for the month. If you are employed, start with your gross wages, and also show how much gets taken out for taxes and other required deductions. When you subtract the required payments, you will have a net monthly income figure. If you receive disability or retirement payments, or any other benefits or entitlements, write them down too. Include any maintenance, alimony, or child support payments. If you get regular gifts from a relative or friend, write that down too. The worksheets will help you think of all the possible categories of income.

Next, write down all your expenses for the month. Start with the largest fixed payments, usually rent or a house payment. If you have car payments, include those, and any other transportation expenses. Food, insurance, utilities including phone, cell phones, and cable, prescriptions and other medicines, ongoing medical expenses, clothing, child care, payments to others for maintenance or child support, and any other regular monthly expenses should all be included. You should also write down your payments on past debts, but keep in separate so that you can tell what your regular expenses are for each month. It may be helpful to keep close track for a month or two by saving all your receipts and adding them up. Many people are surprised by how much they spend on incidentals like coffee, bus fare, and lunches out.

Think about the difference between expenses for things you need versus things you want. We live in a place and time where advertisers are constantly trying to convince us that we need the latest, greatest car, outfit, or new gadget. Focus on meeting your true needs first, and budgeting will be a lot easier.

The best reason to make a budget is so that you can be in control of your financial life. There is an old saying: Knowledge is power. If you really understand how much you make each month and how much you spend each month, you can begin to make choices to improve your situation.

No matter how hard you work or how carefully you budget, you may not be able to repay your debt. Try these suggestions to increase your income. In some circumstances, bankruptcy can be a good option to restore you to financial freedom. At Resolve Legal, experienced Washington bankruptcy lawyers can help you decide if bankruptcy is a good option for you.

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