When your debts are overwhelming, filing for bankruptcy might seem like the only option left. While this is a valid route for many people, you may be able to avoid it by working toward debt repayment in a different way. Learn more about some of your other options and consult a debt lawyer before making a final decision about filing for bankruptcy.

3 Ways You Can Avoid Bankruptcy

1. Debt Settlement

Debt settlement is a process in which delinquent debtors negotiate a repayment plan with creditors. You and your debt lawyer can work with creditors to get a good portion of your debt forgiven. The remainder will then be divided over a more feasible payment plan. While this option will allow you to save cash in the short term, it will show on your credit report and may lower your score. You may also be required to pay taxes on the forgiven debt as revenue. However, this is an alternative to bankruptcy that can have less long-lasting consequences.

2. Debt Consolidation

Debt consolidation is when you combine all of your debts into a single loan to make the payments more manageable. If you choose this option, you may get lower interest rates, and any collection activity will stop.

3. Expense Elimination

Before filing for bankruptcy, check your monthly budget for anything you can eliminate to open up some cash reserves. Separate your expenses into wants and needs, and be strict about eliminating the wants for the time being. You may be surprised at how much money you can free up to allocate toward your debt payments.

Discuss these bankruptcy alternatives with Greg Dunn, Bankruptcy and Debt Relief Attorney. This debt lawyer has served Honolulu residents since 1996. He and his team provide in-house negotiations with your creditors to get you the best possible arrangement. Schedule your first consultation with the debt lawyer today by calling (808) 524-4529, or learn more about the practice by visiting the website.