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Bankruptcy May Not Be the Best Answer to Financial Troubles

Considering bankruptcy? You may want to reconsider the consequences of such a decision to your credit or future employment prior to filing. Besides, there are plenty of good alternatives to consider as viable options before deciding to file for bankruptcy.

In today’s economy, it is easy to get into a squeeze from high credit card balances, loss of income, garnishment, medical bills and-or repossession. Coupled with the creditor harassment that comes when late or not paying, filing for bankruptcy protection may seem like relief. However, there are some ways to avoid bankruptcy.

Many people collapse from the pressure because the constant calls and regular mail from collection agencies is not easy to handle because they are constant reminders of the money they need that is not readily available. Nonetheless, if you want to protect your credit history, this article will provide you with some simple ways not to go bankrupt. –valerie samuel

  • Budgeting is always a great idea because it helps to determine where you are and know what income is coming in and going out as well as show the shortfalls and gaps.
  • Increasing income is another option for many because it will close any gaps instantly once you have found a better-paying job, a part-time job or an additional source of income.
  • Selling assets on eBay or craigslist is inexpensive but does provide access to huge marketplaces of prospective buyers seeking great deals on furniture, jewelry, art or any electronics.
  • Asking creditors for modifications by writing hardship letters works and should be one of the first options you try to get a lower payment or a halt in the interest on credit cards or outstanding debts.
  • Cut out some of these nice-to-have luxuries like cable, satellite television, Netflix, FiOS, cell phone and eating out. Start bringing lunch and sticking to your new budget.
  • Borrow from family and friends to get caught up and settle those outstanding debts.
  • Read the Bankruptcy Abuse Prevention Act and know the law surrounding filing for bankruptcy before actually filing.  Bankruptcy does not rid you of back taxes, student loans, alimony or spousal and child support, so have a plan prior to going in on how to manage these debts.
  • Always speak to a lawyer in the state in which the bankruptcy filing will take place.