Tops Ways of Avoiding Bankruptcy

bankruptcy

Present circumstances have made debt almost normal for most people. But sometimes situations can arise when a debtor is in no position to pay his debts. Bankruptcy is that legal procedure that allows the debtor individuals, couples, and businesses exempted from repaying partial or all of their debt when they cannot meet their financial liabilities. But, it comes with its own set of difficulties and this is where a bankruptcy lawyer can be helpful. Most importantly, it destroys your credit score. Hence, it is better to try all alternatives before filing for bankruptcy even if it is costlier to takes longer to repay your debts. Some of the ways to avoid bankruptcy are –

  • Debt Settlement – This is a legitimate and logical option especially when you are unable to pay the minimum monthly installments of your debt. Here the debtor negotiates a mutually agreeable deal with his creditors. With fresh chances of getting their principal amount back, most lender are agreeable to procure a reduced payment plan schedule which may encompass waiver of interests, waiving of current payment for a specified time on conditions of making larger payments down the line or paying lower amount for a longer period of time.
  • Debt Consolidation – In this type, you repay your liabilities without losing your assets. Here you take a new loan, preferably from a new lender with more suitable arrangements to settle off the older loans. Another option is that a credit counseling agency or debt management firm steps in and assists you in reducing your penalties and interest rates. In this scenario, you pay your monthly installments to that company and calmly manage your own bills to work your way to becoming debt free.
  • Selling Your Assets – If you owe any assets like jewellery, car, property etc, there is a high probability that the bankruptcy trustee would seize it and sell it to settle your debts. Hence it’s reasonable that you personally sell them off and repay your debts. There is a high probability that you would get a better value for them. It may be inconvenient that you live without them but it is better than bankruptcy. If possible, you can also mortgage them to raise cash and then buy back later or pay the mortgage later and retrieve it back.
  • Seeking Help from Friends and Family – You can seek your family’s assistance and understanding and live on a tighter budget to save money and get in a better position to repay. If your spouse or children are working, they too can contribute in repaying the loan and avoid bankruptcy. You can resort to help from your trusted friends and other family members in either helping you with cash or providing opportunities to earn more money.

The best thing you can do for yourself is to hire a bankruptcy lawyer for yourself to make sure that you are doing it the right way.