What Alternatives Are There To Bankruptcy?
April 3, 2008 – 4:41 pmNo one wants to file for bankruptcy. You hear about big corporations doing it all the time. But corporations are different than an individual. Finding alternatives to bankruptcy can save you a world of trouble in the long run.
A debt consolidation loan may be the answer. Debt consolidation is when all your debt is combined with one loan for the total amount. Creditors are paid money owing to them and the bank who issues the loan receives a reasonable monthly payment from the consumer.
Debt consolidation mostly includes unsecured debt. This would be credit cards, store credit cards, unsecured lines of credit from companies, and gas cards. Unsecured debt is what creditors have a hard time recouping from people because it is not backed up by any collateral.
If you can’t find a bank that will give you a debt consolidation loan, go through an agency. The agency counselors are used to working with creditors and will negotiate on your behalf. They can get your debt dropped by as much as sixty percent. You then make just one monthly payment to the agency, and they take care of the rest with the creditors.
Debt consolidation does not involve liquidating your assets. With bankruptcy proceedings, the court may rule that you have to sell your belongings to pay the creditors. Debt consolidation allows you to keep the things that you have and comes up with another solution.
Something else that you can do yourself is to get another income. It’s not the easiest thing to do but if it allows you to increase your credit card payment monthly for a year or two until it’s eliminated, it could be worth it. If you can’t manage a second job then maybe you can get some overtime at your current one. The key to reducing your debt is finding a way to bring in more money.
The second job can be a way to supplement your income while you are paying off a debt consolidation loan. Things come up without warning and you may need more cash than you have available. A second job will help you to save for a rainy day and still make payments on your debt.
Starting a home business is another option. Some home businesses can be started with little or no money if you don’t have time for a second job. Even selling items on eBay can bring in some extra cash when needed.
If you have a special skill you may be able to loan yourself out to others who could use your services. Use the extra money wisely to pay down your debt.
There are better alternatives than to file bankruptcy. The alternatives that you pick don’t need to be forever, just until you can get yourself back on track financially.
Tags: Bankruptcy
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