Just Say No To Filing Bankruptcy

Many people are facing the possibility of filing for bankruptcy. Sadly, many
people who are in this position have been given bad or poorly explained
credit advice and are wondering if there are any other alternatives to going
down the bankruptcy road.
There are options available to keep your good name and pay your debts.

Should I avoid Bankruptcy?

To begin with, filing for bankruptcy is a personal decision and one that can
only be made by the individual in debt. Although only the individual can
make this decision, there are people or companies out there that will
discuss options and help debtors come to an educated decision whether to
file for bankruptcy or to avoid it. A non-profit organization is the best
avenue.
Beware of companies charging outrageous fees for their services, as often
they are only interested in making money from those in dire financial
straits.

Often creditors harass those who are facing financial ruin to make their
payments, this is because that is the only weapon they have. These threats
can further add to a debtor's confusion and stress. There are some simple
things to keep in mind about debtors and who you should be paying first and
who can wait. Make a priority list of the debts you should be concentrating
on. Depending on your situation, if you want to keep your home and main
vehicle, than you should concentrate on these two debts over your credit
card or medical bills.

There is a good reason for choosing to pay other bills over medical and
credit card debts. In order to take property from a debtor in the form of
assets or possessions, these creditors must first take a debtor to court
before they can take their property or possessions. Debts such as fines,
alimony, child support, income taxes and student loans on the other hand
don't need to go through this process. By filing for bankruptcy it is likely
these debts will still remain.

Trying to get creditors to give you a break should not be the deciding
factor in choosing to go down the bankruptcy road.
Even though this approach may bring temporary relief from lawsuits and
arguments with creditors, bankruptcy is only a short tem solution. Once
bankruptcy has been filed the person will be no better off than they were
before. In hindsight, by avoiding bankruptcy, a person can sort out their
affairs and come out a little better off than if they had chosen to file for
bankruptcy.

Debt Management, How can I avoid Bankruptcy?

One of the first methods that should be used when trying to manage debt is
to contact the people that you owe money to, for instance, financial
institutions and credit card departments.
Explain your current situation to them and see if an arrangement can be made
to reduce your payments or waive late fees until you have caught up on
payments.

If this fails, don't be afraid to use the power of a good threat. Write
letters to all of the creditors that money is owed to and tell them that you
are likely to have to file for bankruptcy. Often the companies will try to
work something out with their debtors or take less money than go to the
trouble of taking debtors to court or having the debt completely wiped out
during bankruptcy.

Is A Consumer Credit Counseling Service The Answer For You?

Another way to avoid bankruptcy and work on better debt management is to
find a good Consumer Credit Counseling Service. This service will usually be
a non-profit organization that will work with you and your creditors to find
a solution or a better payment plan that will suit your finances.

Keep in mind the CCC is good for quieting your creditors, removing late
fees, and lowering interest payments. If you have an old debt that hasn't
been collected on for a while, you might want to contact an agressive debt
consolidation company. They maybe able to negotiate as much as 60% off your
orginal debt.

By consolidating your debts into one loan you can reduce the number of
creditors and fees that you will be responsible for.
Be aware of the consolidation loan policies on transferring money from other
sources to the loan, as this can sometimes be costly. Often it is possible
to borrow against your home to pay debts in this manner, although this can
be risky at times as you may face loosing your home if you can't make the
payments.

The other option that you may be able to exercise is to sell off your assets
that have value and pay that amount off on your debts. This may seem like a
difficult option, although, if you are filing for bankruptcy, it is likely
you could loose all of your assets anyway.

Bankruptcy is a process that is best avoided. If a debtor does decide to
file for bankruptcy, it should be because they are left with no other
option. The debtor should also be aware of the debts that cannot be wiped
out by the bankruptcy process, even then a debtor seeks the help of a Credit
Counseling Service before proceeding.

About The Author: Liz Roberts is a loan consultant with BadCreditResources
and a freelance writer. Bad Credit? You can still get financed. Visit our
list of banks that give bad credit loans.
http://www.badcreditresources.com/bad-credit-loans.html