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Bankruptcy You Have Alternatives

Avoid Bankruptcy You should view it as a last resort. There are several possible alternatives to bankruptcy for those individuals who find themselves in a financial situation that they don't see any other way out of. It is important that when you consider these options, that you investigate the companies you are dealing and make sure they do not do anything that makes your financial situation worse. Some options to avoid bankruptcy may have an impact on a future bankruptcy filing if the alternative choice does not work.

The alternatives are negotiating with your creditors, credit counseling services, and debt consolidation loans.

For answers to your bankruptcy questions or to see other's bankruptcy faq's use our bankruptcy forum.

Negotiating With Your Creditors

If your goal is to avoid bankruptcy, you may attempt to settle your unsecured debt at a reduced amount. Contact each of your creditors and ask them to work with you. Explain your situation to them. They may allow you to make a reduced payment, extend your term or reduce your interest. If your creditors won't work with you there are companies that will help you negotiate with your creditors. It is critical that these negotiations are properly handled and if you are not certain what to do, seek professional help. As in all these actions there can be a negative effect on your credit rating.


Credit Counseling Service

Credit counseling services can be a good start in helping you deal with your financial problems. They may be able to consolidate all of your monthly payments into one manageable payment and may be able to secure interest or payment reductions on your unsecured debts. One of the problems with credit counseling is that many consumer are in such financial difficulty that they will not qualify for credit counseling because they will not be able to repay their debts even with the better terms.

Debt Consolidation Loans

Another option you may have is to borrow against the equity you have in your home to reduce your credit card debt. This of course requires home equity and careful consideration to make sure you are not putting yourself in a worse position. Should you not be able to repay your home equity loan, you would most likely be in a worse situation than if you were not able to repay your credit card debt.

Summary

You do have to avoid bankruptcy. Review your choices carefully and choose what will work best for you. Just make sure you can fulfill any commitments you make or you may find yourself in a worse position than you where before. You should also consider your credit after bankruptcy. Will you be able to get a car loan, mortgage or credit card?

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