Debt is a way of life for several people. It can be so overwhelming that bankruptcy appears to be the sole answer. Because bankruptcy can have such a traumatic effect on your credit score, Scottsdale bankruptcy lawyers recommend seeking other alternatives before filing for bankruptcy. If one of the following bankruptcy alternatives saves your credit, it’s better to take it, even if it will take more time or cost more to get rid of your debt.
Sell Some of Your Assets
Sell whatever you can spare and use the cash to pay off your debts. You should take action as soon as you notice that you can’t afford to make payments anymore. If you wait until you’re behind, it may be too late.
You can sell furniture, jewelry, and electronics on eBay, for example. Is this an extreme way to avoid bankruptcy? Maybe it is. Many people can’t get past the inconvenience of living without their material items, but you can adjust and it’s only for a short period of time. It will help you avoid bankruptcy and spare your credit.
Pay Your Way Out of Debt
Can you afford to pay off your debts over a predetermined period of time? If you take a closer look at your budget, you may be able to eliminate those non-essential luxuries such as cable or satellite television, landline and cell phones. These are examples of some expenses you can wipe out without too much hassle.
If you’re already living on a strapped budget, consider increasing your income by working overtime or part-time. Hobbies and skills can also help you get some extra money to avoid bankruptcy.
Ask Creditors For Help
Your creditors would rather get some money from you than no money at all. Let your creditors know you are having financial struggles and want to avoid bankruptcy at all costs. Express your willingness to pay the debt and ask if they can help ease the burden by lowering your monthly payment or decreasing your interest rate. Many credit card companies and banks have hardship programs designed for this type of situation.
Before you enter a hardship program, be sure that your monthly payment and interest rate actually go down. Otherwise, you could be stuck with an even higher minimum payment.
Pursue Consumer Credit Counseling
If you have no luck working with creditors on your own, find a professional. You can pursue a consumer credit counselor who has experience working with creditors to get your payment and interest rate lowered.
The new bankruptcy law requires credit counseling prior to bankruptcy filings anyway, so it’s worth strongly considering credit counseling as an alternative to bankruptcy.
Get Help From Family and Friends
Generally, borrowing money from family and friends is not a great idea. It’s been known to result in hardships and even end relationships. However, there is an exception to every rule, and bankruptcy is one. Take the time to calculate how much money you need to avoid bankruptcy. You should carefully consider how much you’re able to contribute, then ask friends and family to help you make up the difference. Generate a plan for how you will repay them once your financial situation has changed for the better.
2018 · 
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