Alternatives to Filing Bankruptcy

Deciding to file for bankruptcy is a decision that should not be taken lightly. Too many people opt for this decision before finding out what other alternatives are available to them. Filing for Bankruptcy should be your last resort if possible. We have listed some alternatives for you to consider below:

Make a Settlement
If the debit you owe is manageable and will not hinder your everyday living and finances it is best to try and pay it in full or to call and make settlement arrangements with the creditor.

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While borrowing money to pay off your debts may seem like a good idea at the time, it shouldnt be your first choice. If you are having trouble paying your bills now, a new loan will only make your struggle to pay bills a harder one.

Debt Consolidation
I am sure you have seen the commercials on TV, heard your friends talk about it or seen the ads on the Internet. A debt consolidation loan can be a good solution but it will depend on your situation. Most debt consolidation loans are secured using your home as collateral by placing a second mortgage on the home.

However, we must advise you that this is a risky choice! When deciding if debt consolidation is a good choice for you, you need to first make sure you will be able to pay all of your other bills on time while being able to survive monthly. Failing to pay a debt consolidation loan could mean losing your home to the creditor. Also, dont pick the first loan consolidation company you hear about be sure to compare interest rates so the payments will be manageable.

Ignoring the Creditors
Ignoring the creditors is an option, but not a smart one as it will only make it worse for you later. Many people fall to ignoring the debts and then they start to pile higher and higher getting more out of control and further from you being able to pay them. If you continually ignore the creditors attempts for payments, you could very well end up with a lien on your home. No matter how large or small the debt is the creditor will continue to hound you for payment.

Whatever you choose as the best option for you, ignoring the problem will only make the situation worse. Taking control of the problem from the start is your best bet.

Credit Counseling
Credit counseling agencies will contact your creditors and make new payment arrangements for you. Most will also be able to get your interest rate lowered and/or have your interest payments stopped.

Some families have found credit counseling to be a good solution for avoiding bankruptcy. It will also get the creditors to stop calling you and allow you some breathing room! Experts say to try and avoid for profit credit counseling agencies and instead try to go with non profit credit counseling agencies. As always, be sure and do your research before making a decision.

Filing Bankruptcy
If you have exhausted all other resources and still feel bankruptcy is your only viable option you can learn more about filing bankruptcy or buy do it yourself bankruptcy forms.

About the Author
Sam Argon is a retired banker who loves to contribute to financial message boards in his spare time. In addition, Sam has written information about filing bankruptcy for - a website offering information for people who are thinking about declaring bankruptcy.