Considering Bankruptcy? You Might Want To Try These 3 Options First

Law Blog

Before you decide to file for bankruptcy, you might want to sit down with an attorney and discuss your options. While bankruptcy does provide you with a fresh start financially, it isn't always the best option for your particular circumstances. Your attorney will be able to help you determine whether or not bankruptcy is right for you. Here are a few other options you might want to consider before filing bankruptcy.

Debt Consolidation Loans

If you have a large amount of debt and stable income, a debt consolidation loan might be a good option for you. Debt consolidation loans allow you to consolidate all of your debt into one single loan payment. You'll take out a loan to pay off all your debt. Once the debt is paid off, you'll make your loan payment each month.

One problem with debt consolidation loans is that they don't stop you from taking on new debt. This means that you'll be able to apply for additional credit cards once you've paid off your current debt.

Debt Modification

If a debt consolidation loan is not an option, you may want to consider negotiating with your creditors for lower payments. As soon as you realize that you can't make your payments on time, you need to contact your creditors. It's easier to negotiate with your creditors before you're too far behind on your payments.

Many creditors are willing to modify loans so that you can continue to make your payments. Most modifications will lower your interest rates and extend the loan period. This can add significant time to the life of your loan, but it can prevent the need for bankruptcy.

Debt Counselling

Regardless of the method you choose for getting out of debt, it's important that you engage in some type of debt counseling. Debt counselling can help you understand the issues that got you in to debt in the first place and can help you avoid future debt problems. Debt counselling will teach you:

  • How to create a monthly budget
  • How to prioritize your debt
  • How to avoid debt
  • How to avoid foreclosure

If you're in debt and don't know what to do, you need to sit down with a bankruptcy attorney. Your attorney will help you understand the options that are available to you. While bankruptcy may be the best option for you, it's important that you speak to your attorney before making that decision.


4 November 2014