Alternatives To Bankruptcy

Bankruptcy - What Are the Alternatives?

Many people in today’s economy find themselves for the first time ever, in the position of considering bankruptcy.

There are many alternatives to bankruptcy if you are willing to put out the time and energy.

Bankruptcy is not something to take lightly and you should take the challenge seriously when researching alternatives that may help you begin to recover financially and prevent that type of legal action.

First thing you should do is to call your creditors, one at a time. Most are willing to work with you if you explain to them your situation.

Tell them you are considering bankruptcy.

Many times, your creditors will work together with you on a new payment plan that you can afford.

Don’t feel you need to hide information from them either.

Be straightforward and open about your financial situation.

Before filing bankruptcy, take a good, long hard look at your finances.

If you do not have a current working budget, then you should begin making one immediately.

Start with your monthly income and deduct your monthly household expenses.

By first understanding how you spend money each month, you will be in a better position to determine where you can begin to make changes.

Perhaps buying groceries in bulk, or cutting back on phone or cable services.

Remember every little bit will help and can make a big difference.

Credit Cards are another culprit to consider for the necessary changes needed. By working with your credit card lenders, you may be able to get your interest rate lowered.

Then you will need to get rid of those high interest credit cards all together.

Avoid the temptation to pay off a credit card with another credit card, as this will only add to the interest rate fees you have to pay. Another option to consider would be refinancing your home or you automobile.

Or, even though it can be uncomfortable to ask; you may have a family member willing to help out, especially if they know you are considering bankruptcy.

If your family member is kind enough to help in this way, make sure your priority is to pay off debt and pay back the loan, even if you have to do it in small payments and over a period of time.