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What Are Alternatives to Bankruptcy?Before filing for bankruptcy, consider alternatives such as consolidating your debts onto one or two major credit cards, selling off all or a portion of your assets to handle tough creditor cases, or handing your situation over to national consumer debt services, such as the Consumer Credit Counseling Service. Just make sure that any entity which helps your navigate your debt comes recommended and fully vetted by independent, consumer protection agencies. You should be wary of firms which claim to manage bankruptcy claims using nontraditional means or artifice. If you mismanage how you resolve your debt issues, not will you be prohibited by law from filing for bankruptcy successfully, but you may also end up in legal trouble or far worse financial predicaments. Creating a single consumer loan may relieve you of having to manage the paperwork of multiple creditor obligations. You can also use the equity stored up in your home (or other large property purchases) to pay down your credit cards so that you are no longer spending hundreds or even thousands of dollars every month on interest fees. Just make sure you understand that when you secure a line of credit with your home or with another piece of property, if you default on that loan, you could end up losing your house or property. Finally, you can work with creditors to create more convenient payment plans. Some creditors may allow you to waive certain late charges, enjoy more drawn-out payment periods, or even reduce the minimum amount you have pay per month. After all, creditors don't want to have to wait in a queue to receive the proceeds of your bankruptcy filing, and they may be tempted to work with you to resolve situations just to put off having to go to trial or file a brief. Regardless of what method you used to stave off bankruptcy, it's critical to learn from your fiscal red flags by setting up a better budget and by developing the mechanisms you need to live within your means and systematically rebuild your credit reputation. |
