7 Things Women Need to Know To Avoid Bankruptcy

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Consider this statistic: 40% of bankruptcy filings are made by women. Most of these women are single, usually on the other end of a divorce. As you probably know, bankruptcy will mess up your credit report for years and make it nearly impossible to get a line of credit anywhere. People who file for bankruptcy usually do it because they feel they have absolutely no other options, but women, if you’re out there reading, remember these 7 things so that you don’t wind up in that staggeringly scary statistic:

You need to know how to:

1. Balance your checkbook. Think this is a given? It’s not. Many women, especially those who hold joint accounts with their spouses, allow their partners to take control of the money while they live in a worry-free environment, free from the “stress” of money matters. Think how stressful it will be if your partner leaves or dies suddenly and you don’t know how to write a check and record it in your checkbook. 

2. Live within your means. While TV commercials and magazine ads would have you believe that you’re worthless if you’re not walking down the street with a $1,000 purse swinging from your arm, the only way you should be waltzing around with a handbag that costs a grand is if you can comfortably carry that much in it and have plenty left over. Too many Americans are so busy trying to buy the latest car, the latest gadget, the latest trendy whatever, that they don’t even realize they’re sinking into debt until they’re being swallowed up. Now is a great time to rein in these materialistic tendencies if you have them.   

3. Budget. This goes along with #2, but if you haven’t yet learned to do this, you need to start today. You have to be able to figure out what you have coming in and how much goes out each month. Are there some areas you can cut back or cut out? Do you really need satellite TV? If you calculate your numbers and you have more going out than you have coming in, you have to cut back and/or make more money and draw up a financial plan.     

4. Pay bills. If you don’t know what bills come in, what they cost on average per month and who you owe money to, now is the time to learn. This includes all accounts in the household: your separate accounts, joint accounts and your partner’s accounts. If he’s not forthcoming about what he owes, that’s a red flag you shouldn’t ignore. Likewise, you need to fess up to him about what you owe.  

5. Manage your finances on your own. I’ll admit, I’m not a huge fan of joint accounts. It’s not the 1950’s and even if you’ve always been a homemaker and never worked outside of the home, you should still have some money that’s your own and that you manage yourself.    

6. Earn more. In the event that you find it difficult to pay your bills on time, you may need to earn more income. This could be in the form of a raise, a second job or a side gig.   

7. Adjust. Things aren’t always going to be the same. That’s the nature of life. If you can’t roll with the punches, it’s going to be very difficult to cope when something changes. You can either curl up in a ball and mope or you can take control of your money and your life and face it head on.

Face it; things sometimes happen. Husbands die or run off with their secretaries to Tijuana. If that should happen, you don’t want to be left behind in such a financial mess that you have no idea how you’re going to get out. Bankruptcy should be an absolute last-resort option, but remember: bankruptcy courts have gotten much more strict in recent years. All of your debt isn’t going to magically disappear because you file. Instead of going through all of that headache, however, take some steps now so that if the worst occurs, you’re prepared.