Alternatives to Bankruptcy
A person should use their assets to their advantage. A way to use assets would be to take out a loan against the house or car. Use the money from this loan to pay off high interest rate loans. This can considerable reduce your debt in the long run.
A person can put in for overtime at work and use this extra money to pay off their debt. By increasing your income by working overtime you can start to see your debt going away. If overtime is not an option at work then look into taking on a second job. Apply all the money from this job toward your debt.
If credit cards seem to be where your debt is mostly at, you need to get rid of the cards. Stop using your credit cards and cut them up. By cutting them up you will not be tempted to rack up any more charges on them. Work toward paying off your credit cards and leave them paid off.
Refrain from over shopping. Buy only what you're absolutely have to have and nothing extra. When shopping for necessities go with off brands and cheap versions of what you would normally buy. Use the extra money that you have saved to pay off your debts. Keep this up until you have complete control of your debts.
Call up each and every one of your creditors and ask about a settlement amount. A settlement amount is the amount of money they are willing to take to call the debt paid. In most cases creditors will be willing to settle a debt for 10 percent to 20 percent less than what you actually owe. This method can save you money and get your debts paid off quicker.
If the settlement amount is too high for you to be able to pay in a one lump sum or the creditor will not offer a settlement amount, then you need to discuss with the creditor about setting up a repayment plan. This will allow you to make small payments every month until the debt is paid. In some cases when you set up a repayment plan the creditor will stop adding interest to the debt.
In the end if you still can not seem to get a handle on your debt then you need to sit down with a bankruptcy lawyer and discuss your options for filing bankruptcy. Remember that bankruptcy should be a last resort option to get control over your debt.
Published by Antoinette McGowan
I am a stay at home mother. I love writing. Many topics interest me when it comes to writing. View profile
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- A person should use their assets to their advantage.
- Refrain from over shopping.
- Call up each and every one of your creditors and ask about a settlement amount.
4 Comments
Post a CommentThis is very helpful. Especially with the newer bankruptcy laws.
Very good article and advice.
Settlement is more complicated. There are specific guidelines that apply to whether and how much of a settlement will be offered and lenders will not disclose the guidelines to consumers. There are also tax and credit consequences. The amount of debt forgiven is taxable income in the year the debt is settled. If you are going to need future credit for a house or car or some other major purchase, you need to consider the effect that a settlement listed on your credit record is likely to have.
Great advice. Bankruptcy follows you for years, so it should only be a very last resort.