Bankruptcy Alternatives
How To Avoid Declaring Backruptcy

There are a number of bankruptcy alternatives available to you. The last thing on your list of debt reduction tactics should be the actual act of declaring bankruptcy.

Before going down that road you should be looking for other ways to seek financial relief. Yes, there can be anxiety and stress involved with being deeply in debt, but through research and perseverance you may get better results using some other debt reduction alternatives.

Even if you are forced to enroll in a program through a debt consolidation company or get credit counseling you may be better off over the long term than going through a bankruptcy court proceeding.

The cost of an attorney can really add up fast and may make other professional debt settlement costs end up being far less expensive. Going this route will also let you avoid some of the harsh consequences that come along with a bankruptcy filing.

Do You Have Some Of These Debt Problems?

• You have 3 or more major credit cards.
• Your non-mortgage debt requires more than 20% of your income every month.
• Your debt burden is causing undo stress on your marriage.
• You use a credit card to pay for items like utility bills, gasoline, or groceries.
• You don't really know how much money you owe.
• You are afraid to even look at your monthly credit card or loan statements.
• You only make minimum payments on your credit cards bills.
• You can't sleep at night because you're thinking about all the money you owe.
• You have no savings.
• You lie about or hide your spending and statements from your spouse and others.
• Following making a credit card payment you spend that amount or more next month.
• If you happened to lose your job, you'd have no way to pay your bills.
• You have bounced checks.
• You are unable to get any new credit.
• You write a check and hope you'll have enough to deposit before the check clears.
• You are at or near you credit limit on all your credit cards.

If you can say that you have experienced or are experiencing more than a few of these symptoms you are likely in a precarious debt situation and should be seeking out bankruptcy alternatives now.

More Bankruptcy Alternatives

Debt Settlement

With a debt settlement arrangement in place you'll have negotiators that work along with creditors to help lower the amount you owe. If you are overwhelmed with making a variety of payments every month or are just so far behind you don't see a light at the end of the tunnel a professional debt settlement company may be a good alternative.

Debt settlement will also work well if you don't own a home or you lack the credit or equity necessary to get another loan. In many cases, it's the least expensive and fastest way for you to get debt free without using the bankruptcy courts. This is assuming of course that you will successfully complete this program and get your accounts settled successfully.

Credit Counseling

A credit counselor will get you involved working with your creditors to try and lower your interest charges. By following their advice, over time, you may be able to enter the debt free zone. Credit counseling is thought to be a safer, but a bit more expensive, when compared to engaging a debt settlement company. This is something you can undertake before you debt issues overwhelm you.

More Tips for Debt Reduction

Chapter 7 Bankruptcy

Doing a reorganization through the courts using Chapter 7 may set you free of your unsecured debts like medical bills or credit cards. But you may have to turn over some or all of your non-exempt property to the court so they can administer the sale of items and attempt to pay off your creditors. If you have little in the way of assets or income this could be a viable option for debt relief. Going this way should really be considered an option of last resort as damage to your credit status may be severe. You should consult attorney for advice before doing choosing this method.

Chapter 13 Bankruptcy

With this method of debt reduction, you are given a mandatory payment plan and you have to give all your disposable income to the court up to five years or until your debts are paid in full. If you get behind in your secured debts like mortgage loans and automobile loans, then this might be an appropriate solution. Again, check with a qualified bankruptcy attorney before even considering this option.

Seek the Advice of a Bankruptcy Attorney

Be sure to always seek the advice of an attorney before you make any final decisions regarding declaration of bankruptcy. If you have credit card debt only then filing for bankruptcy would make little sense. There are better ways to get debt relief for credit card issues that would over time have far less detrimental effects on your credit rating. Remember bankruptcy alternatives need to be explored thoroughly.

Liquidating Assets

If you own a fair bit of personal property you may be able to liquidate some of your assets to escape the consequences of carrying huge debt burden. This very well could be the outcome of any Chapter 7 bankruptcy proceeding so doing it yourself without court intervention would be preferable. It all depends on your state's bankruptcy exemptions and specifically what property you own.