3 Alternative Options To Bankruptcy

17 July 2019
 Categories: Law, Blog

Bankruptcy is something you might be able to use to find relief from overwhelming piles of debts you owe, but it is always a good idea to examine and evaluate alternative options before using bankruptcy. In fact, if you decide to file for bankruptcy, you will take a credit counseling course that will teach you about the alternatives to bankruptcy. This is a requirement, primarily because filing for bankruptcy is a big deal. As you evaluate your options, here are three alternatives you may want to consider using.

Debt settlement

Did you know that some creditors are willing to work with borrowers when the borrowers are experiencing trouble repaying debt? Creditors might agree to settle the debt for a lower amount, or they may agree to knock off all late fees and stop charging interest. This process is often called debt settlement, and it is a good option to look into before using bankruptcy. If your creditors will work with you, you might not need bankruptcy; however, you might need some cash on hand in order to settle right now for the lowest amounts possible.

Debt consolidation loan

A second alternative to consider is getting a debt consolidation loan. This is a type of personal loan you take out, and it is an installment loan, which means you make payments for a set amount of time. The payments are all equal, and the loan will last a stated amount of time. With the proceeds from the personal loan, you pay off all the outstanding debts you have. While this method still leaves you owing the same amount of money, it generally offers a lower interest, which means you will be saving money. Additionally, you will have one payment to make each month instead of many payments.

Credit counseling

Finally, there are firms around that offer a service called credit counseling. Credit counseling services are designed to help you come up with the best type of plan for repaying your debts, and it often involves the counseling center negotiating with your creditors to reach an agreement on repayment of the debt. In addition, credit counseling offers help learning how to budget and handle your finances in better ways.

While these three options can be helpful in some cases, they are not always the best options for everyone. In fact, bankruptcy might still be the best choice for you, and you can find this out by evaluating these methods and by talking to bankruptcy lawyers like those at law firms like georgettemillerlaw.com.