Bankruptcy can be really expensive. You pay lawyers fees, then you lose your property anyway, after spending thousands of dollars. So many people in financial distress are looking for any kind of alternatives to bankruptcy they can find. Are there any true alternatives to bankruptcy out there, or is it the only way you can rescue your financial situation?
One bankruptcy alternative is to just do nothing. That’s right – don’t waste time with court, filing, and high fees. If you don’t own any secured property you want to keep, then let the creditors just keep calling. they may file suit, and get a judgment against you, but if you have no property, it will be hard for them to execute on that judgment. In some cases, you may have your wages garnished, but if it gets to that point, you can consider bankruptcy then. True you may have to change you phone number, since creditors will be calling you nonstop, and trying all kinds of sleazy tactics to get you to pay, but that’s the price you’ll have to pay.
Another bankruptcy alternative is to try to work out deals with your creditors on your own. If you have a regular income, a bankruptcy court will probably expect you to file Chapter 13. And in Chapter 13, what you will do is file a repayment plan with the court. So why not set one up on your own? Today, with debtors in so much trouble, many lenders and creditors are offering many new programs and repayment options for everything from credit card debt to car and home loans. It pays to at least try to work with them. In the end, if they refuse, then bankruptcy remains an option for you.
Another option might be to try to consolidate debt. The best debt consolidation loan would be one with lower interest rates and fees. Regardless of the terms, however, you might want to see if you can qualify, and thereby pay off – and close – some of your other debt to reduce payments and keep your payment schedule current.
Sometimes, you can sign up with a credit repair firm who can help you with working out plans with your creditors. Firms like Care 1 Credit are set up to help you work with creditors to repay debt. This can be one of the more useful bankruptcy alternatives available to you.
Remember that some debts, like child support and student loans, you can’t discharge in bankruptcy anyway. So for that type of debt, you don’t really need an alternative, you need to adjust your current repayment plan if possible. Bankruptcy alternatives won’t work in every case, as you can see.