Bankruptcy sometimes feels like it is the only option, especially if you’ve got debt collectors calling day and night. But the reason some consumers feel it’s the only path in front of them is that they don’t know how to avoid bankruptcy. It’s important to know that you sometimes have alternatives, if for no other reason than the toll that bankruptcy takes on your credit and financial forecast.
If you’re in a tight spot and are starting to consider whether to resort to bankruptcy, make sure you exhaust these alternatives first.
Sell Some Assets
The moment you realize that you can no longer make the minimum payments on your car, your home, or any other assets you’ve accumulated, it’s time to cut your losses. It’s not going to be easy to sell the things you’ve grown attached to or even feel like you need in your life, but if you want to know how to avoid bankruptcy, this is your first step. Sell your furniture or jewelry online. Downsize your car and your home if you can. These might seem like drastic steps to take, but drastic is exactly what you need right now.
Adjust Your Lifestyle
You will have to get used to going without, which might seem difficult at first. But you’d be amazed by how much people can actually do without. If you’ve already cut everything to the bare bones in your budget and you still can come up with the money for your bills, you need to find a way to bring in some extra income. Consider looking for a second job to fill in the gaps.
Talk to Creditors
You might be surprised that the same creditors who won’t stop calling will be quick to work out a solution if you mention you are considering bankruptcy. It’s the truth. Creditors would rather recoup some of the money they loaned you than nothing at all. Have a conversation with them to see if there is some way that they might help lighten your burden, perhaps by lowering your monthly payment or interest rate so you can start making a dent in your debt.
Talk to Family and Friends
Family and friends might be willing to help if you show them that you are responsible and that you have a plan to pay them back. Even if they aren’t able to help financially, they might know where you can learn how to avoid bankruptcy.
Settle with Creditors
Debt settlement, like bankruptcy, should be avoided. But debt settlement should come before bankruptcy. If you’re going to settle a few debts, though, you need to do it the smart way. Don’t settle any debts that your payments are current on. Rather, focus on debts that have already gone to collections.
Want Specialized Help to Learn How to Avoid Bankruptcy?
Filing for bankruptcy is a big decision. Make sure that you’ve exhausted every alternative available to you first. Call today. 305-441-9530