The 5 Financial tips for the first week of January 2013 are given below:

Tip no 1: Selling off a part of one's personal assets is better than liquidation under bankruptcy to repay the loans.

The court appointed bankruptcy trustee evaluate your assets and determines what to sell in order to discharge debts. The sale proceeds are used to pay back the creditors. You can avoid this predicament all together by selling your assets on your own.

If debts are troubling you, then consider selling some of your assets. For instance: antiques, a second vehicle, etc. Approach an appraiser to have an estimate about the value of your asset. Sell the asset and repay your debts before you're being compelled to file bankruptcy.

Tip no 2: Borrowing from acquaintances in order to repay your debts is much better than bankruptcy.

You may feel awkward and shy to borrow money from your friends or family members in order to repay debts. You may not want to risk your sweet relationship with your friends. However, it is much better to ask money from your relatives rather than filing bankruptcy. This is because your credit score falls by 200-250 points after filing bankruptcy. Moreover, it becomes very difficult to get a new line of credit after bankruptcy. You may be able to obtain a loan after 2-3 years of filing bankruptcy.

Borrow money from the people you trust. Plan the mode of repayment also. You can't afford to sour your relation with your near and dear ones.

Tip no 3: Run away from payday loan lenders to avoid debt in 2013.

Payday loan lenders give loans very happily to the borrowers. They don't even check the credit score of the borrowers. However, they do charge a very high interest rate on the loans. Borrowers struggle to pay such high interest rate on the payday loans.

It has been seen that usually borrowers are able to pay the interest rates in the initial months. However, borrowers are compelled to skip payments in the subsequent months. It is simply not possible for the borrowers to keep on making huge monthly payments. Thus borrowers soon get into financial problems.

If you’re facing financial constraints and need money, then take out a personal loan from your friends or family.

Tip no 4: Change your spending plan instead of consolidating debts.

Consolidating bills into a low single monthly payment may seem to be the solution to your financial problems. However, it may not be so in reality. You may get into deeper debt problems after consolidating your bills. If you don't change your way of spending dollars and continue to accrue debts, then your problems will never be solved.

Amend your spending style instead of consolidating your debts. Spend less and save more in order to repay your bills. If you fail to pay off debt on your own, then take resort to debt consolidation.

Tip no 5: Pay yourself after repaying your debts to boost emergency savings.

Sometimes, too much debt restrains you from saving for your emergency funds. So, once you've repaid your debts, channelize all your funds towards savings. Save money for your emergency fund.

When you've several debts, you're practically living without the money. You're unable to touch the money. However, after the debts are paid off, you can use the money to build your emergency fund. This emergency fund will act as a financial cushion during monetary problems. You won't have to take out a loan and get into debts in future.