Few people will actually want to file for bankruptcy even if you often hear about big corporations doing it all the time, but individuals are very difference from corporations. As an individual, finding an alternative to bankruptcy can save you a lot of trouble in the long run as it isn’t a solution without side-effects.
First off, consider loan to consolidate your existing debts. Debt consolidation means that all of your debt is grouped together and a loan secured for the overall amount. Creditors get paid what is owed to them and the bank that issues the loan is given a monthly payment that the consumer can afford. Very much a win-win situation for all concerned.
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 then try going through an agency. The agency counselors are used to working with creditors and can negotiate on your behalf. They can even 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 at much less than their market value in order to pay your creditors. On the other hand, debt consolidation allows you to keep the things that you have and offers up another solution.
Another option is to get a second job. It isn’t necessarily a pleasant option, but if getting another job will allow you to make a sizeable credit card payment each month for a year or two until your debt is repaid, then it will prove to be well worth it. If a second job is not feasible, ask about overtime at your current job. You need to find a way to make more money if you want to reduce your debt.
A 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.
You could also consider starting a home business. For those who are in a time crunch that prevents a second job, a home business may be the most suitable option. Most can be started with little or no money. For example, selling unwanted items from around your home on eBay can bring in some extra money when you need it most.
Do you have a special skill? Market that to others who could use your services. Remember to earmark the money to be used for resolution of debt and not to spend freely and incur more debt.
Bankruptcy is not the way to go if you don’t absolutely have to. Always try to seek alternatives to this final course of action. Any changes you make don’t have to be permanent, just until you get out of debt and back on a more stable financial footing is what you’re aiming for.