Mar 11

Alternatives to Bankruptcy

Sometimes bankruptcy is inevitable, and that is why there are many legal professionals that can help you file for one, such as Erin B. Shank, P.C. But also sometimes, there are alternatives that can be better options than filing for bankruptcy.

Negotiating debts

If you think you are on the brink of bankruptcy, sometimes the best option is negotiating with your creditor. You can have a debt consolidation plan to turn your debts into a single loan with a monthly payment, which somehow reduces the pressure of paying because of lower interest rates. You can also go with debt settlement, where you and your creditor can have an agreement on a reduced payment plan schedule.

Selling assets

Before filing for bankruptcy, it is also a wise option to liquidate your assets and consider the possibility of selling them, to pay off debts as soon as possible. These assets may include cars, houses, lands, jewelry, and other items that you may be willing to give up so you can stay financially afloat. This may not give you a significant amount of cash to pay off everything, but it provides you a cushion.

Borrowing money

If you are about to be bankrupt, it is not shameful at all to ask your family and friends for financial help. They may be the very people who can save you from all the hassles bankruptcy can offer. But before borrowing money from a trusted contact like a family member or a friend, make sure if it is an option that can actually solve the problem, and not just a temporary solution that may end up putting you on greater financial burdens. Also, consider the ways of how you are going to pay them back.

Adjusting your spending habits

It is obvious that you can save money by limiting the money you spend through lifestyle and operation changes. The first thing you need to do is liquidate your expenses. Determine the areas that can afford cutbacks. For individuals, this may include credit cards, movie tickets, and restaurant bills. For businesses, this may include operation costs. Once these areas have been determined, set up a plan to reduce their costs or completely eradicate them.

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