--------------------------------------------------------------- Summary
Bankruptcy is when an
individual (or organization) has legally declared
inability or impairment of ability to pay
their creditors. A declared state of bankruptcy
can be requested or initiated by the bankrupt
individual or organization, or it can be requested
by creditors in an effort to recoup a portion
of what they are owed. However, in the overwhelming
majority of cases, the bankruptcy is initiated
by the "bankrupt" individual or
organization.
Bankruptcy
Alternatives
There are several paths
you can take to try and avoid filing for bankruptcy.
As stated for some bankruptcy is a very legitimate
option when the situation and numbers make
sense. However, before coming to that decision
it's always a good idea to see if there may
be another viable option. Here are some of
the most frequent alternatives to filing bankruptcy:
1) Debt
Consolidation. You can use a debt
consolidation loan by borrowing against the
equity in your home to pay down your credit
card debt. This option requires home
equity and a careful consideration to
make sure you are not putting yourself in
a worse position. Not being able to pay your
a loan against your home could put you in
a worse position than not being able to pay
your credit card debts (risking foreclosure).
Some debt consolidation companies you can
look into include:
2) Debt
Counseling. Debt counseling services
can be a good place to start in helping you
deal with your credit situation. Such agencies
can work with you to consolidate your monthly
payments and help work with your creditors
to obtain payment or interest reductions on
your unsecured debts.
The only problem with debt counseling is that
many people are in such financial trouble
that they will not qualify for debt counseling
because they will not be able to repay their
debt even under the better terms. Try to proactively
see if this may be an option for you. Some
debt consolidation companies you can look
into include:
3)
Debt Settlement (Out of Court). Another
possible alternative to bankruptcy is to consider
settling your unsecured debt at a reduced
amount. It is harder for an individual to
do this alone, but there are companies that
will help you negotiate with your creditors.
Some have found better results when going
through a professional company in this regard.
As in all these actions there can be a negative
effect on one's credit rating. Some debt settlement
companies you can look into include:
