Although bankruptcy can effectively eliminate all kinds of debt, it’s not necessarily the right approach for everyone who needs a financial restart. Because it has a few major drawbacks, it’s wise to explore the alternatives before filing your petition. Here’s a closer look at viable alternatives to keep in mind.
Debt Relief Options to Consider Before Bankruptcy
1. Debt Settlement
Creditors are usually inclined to settle debts with borrowers because receiving some money is better than receiving nothing at all. If the borrower ends up filing bankruptcy, creditors know the latter is more likely.
If you want to attempt to settle your debts, a seasoned attorney will help you negotiate with lenders. Depending on the circumstances, it may be possible to secure a more manageable payment plan or even wipe away a significant portion of your debts.
2. Asset Liquidation
If you file Chapter 7, the trustee will make you liquidate non-exempt assets to pay back creditors. By liquidating any such assets yourself, you can retain control of the proceedings. You can also avoid the hit your credit would otherwise take by declaring bankruptcy.
Consider what kinds of property you’re willing to part with and post it online on applicable commerce sites. Hosting a yard sale is also a viable way to liquidate lower-value property you no longer want. Then, use the funds to pay down your debts until their minimum monthly payments fit in your current budget.
3. Debt Consolidation
Debt consolidation entails rolling multiple high-interest accounts—like credit cards, for example—into a single loan with a much lower interest rate. Depending on the total amount you consolidate, you could end up saving thousands of dollars in interest alone. You’ll also simplify your financial obligations because you’ll only have to make one monthly payment instead of several.
If you’re having trouble getting out from under an overwhelming amount of debt, turn to The Gil Law Firm to explore your debt relief options. Located in Dothan, AL, and serving clients throughout Alabama, Florida, and Georgia, this bankruptcy firm is proud to help individuals regain their financial footing. Since 2000, consumers have turned to them for strategic guidance without judgment. To explore all their practice areas, visit their website. Schedule a consultation by calling (334) 673-0100 today.