Bankruptcy is not always avoidable. Many people find themselves facing financial uncertainty because of unexpected events that were completely beyond their control. However, in other cases, bankruptcy can be the culmination of years of financial decisions — small at the time — that finally add up to an unmanageable debt situation.

Fortunately, there are several things that consumers can do to avoid getting into this situation or to avoid repeating history if they have already been through bankruptcy. Imparting these lessons to distressed consumers is part of the reason that the law now requires consumer credit counseling for all personal bankruptcy petitioners:

• Budget — Budgeting your expenses each month not only allows you to meet your living expenses without relying too heavily upon credit, but it also allows you to add savings into your budget to give you a cushion for unexpected expenses or losses of income.

• Manage credit cards — Credit cards have brought a tremendous amount of convenience to our lives. Unfortunately, they also make it very easy to spend a large amount of money without realizing it until the end of the month when the statement comes. Keeping track of credit card charges can help you better understand and manage your expenses.

• Understand long-term debts — One of the biggest contributors to the housing crisis was the fact that thousands of people entered long-term debt repayment agreements that looked good at the time without really understanding what they entailed. When borrowing money to make a large purchase, be sure to shop around to find the best terms, and make sure you understand the loan terms before signing.

Taking these steps before your financial situation has deteriorated drastically can help decrease your risk of bankruptcy. However, if your financial situation has already become dire, our Georgia bankruptcy attorneys can help you take the necessary steps to confront your debt head-on.