Are you deep in debt and planning for declaring bankruptcy? Wait a moment and think hundred times before you actually take a step ahead towards filing bankruptcy. It is perhaps the easiest option that helps you get rid of all outstanding debts. You can file bankruptcy in the court, at any time. However, make sure you are well informed about the cons of filing a bankruptcy lawsuit.
Bankruptcy can severely damage your credit score. Your credit score is likely to experience a drop like a stone, after you declare bankruptcy. Bad credit score can cease your ability to get any new loan. You may even face difficulties in getting a job, if you have declared bankruptcy. In a nutshell, filing bankruptcy can cause unforeseen financial distress for you as well as your family. Therefore, you must think about some good alternatives such as debt settlement, credit counseling or debt consolidation, to bankruptcy.
Alternatives to bankruptcy
Nowadays, millions of Americans are filing bankruptcy for several reasons; but it should not be the only option to get rid of debts, rather it should be the last option. To avoid bankruptcy, you can choose any of the alternatives discussed below as per your requirement and situation.
- Debt settlement – This is one of the best and most effective options that can help you get rid of huge financial burden. There are a number of debt settlement companies that work for people like you for minimum fees. You can seek their help or do it by yourself. This alternative helps you negotiate with your creditors and settle down your unsecured loans including credit card loans, for an amount lesser than what you actually owe.
- Credit counseling – If you feel uncomfortable to talk to the creditor, then you can get help of a credit counseling agency. Credit counseling agencies play important role to avoid bankruptcy. These agencies negotiate with the creditor, on behalf of the debtor to lessen the rate of interest. At the same time, the credit counselor helps by jotting down a repayment plan approved by both you (debtor) and your creditor.
- Debt consolidation – This is another good alternative to bankruptcy. This method helps you consolidate your entire outstanding debts into a single manageable debt. This unique technique is much effective to prevent bankruptcy. The actual purpose of this program is to lower your financial burden of paying off delinquent loans by reducing the rate of interest.
Debt settlement, debt consolidation and credit counseling are most useful methods to prevent bankruptcy. However, if the above-mentioned options fail to help you, then you can declare bankruptcy.