Know your Options: 4 Alternatives to Filing for Personal Bankruptcy

If you are experiencing financial problems and feel that declaring bankruptcy is your only option, know that there are other options. There are many ways to deal with credit problems and these 4 alternatives are options to consider for your own situation. In most cases, these techniques can help you to greatly improve your financial situation and to easily meet your debt obligations in just a short period of time.

Contact Your Creditors

When you are beginning to experience financial difficulties, contact your creditors and ask them to help you work out a temporary alternative payment plan. If you contact each of your creditors, you may be able to afford all of your expenses without damaging your credit. If you have student loans, you may qualify for a deferment. Don’t let things get out of hand before you call your creditors and get their advice. Seek professional help as early on as possible so that you don’t get to a point where bankruptcy is your only option.

Reduce Your Unnecessary Expenses

When you are facing challenges meeting your financial obligations, take a look at your spending habits. Are there unnecessary expenses that you can cut out of your budget? This does not mean that you should stop spending money on essentials, but perhaps you can find some ways to cut back on your spending. If you are not good at budgeting, this is where seeing the advice of a financial adviser could greatly benefit you. Having someone help you set up a budget and go over your monthly expenses will help you get your finances organized and back on the right track.

Consolidate Credit Cards

Credit card companies are always looking for new customers. According to the professionals of Paddon & Yorke Inc., who help clients with bad credit in Toronto, if you have several high interest credit cards, you may be able to find one that will allow you to consolidate your balances onto a lower interest card. This can save you a significant amount of money and help you pay off your debt at a lower interest rate. This option may not be a possibility for everyone, but it is worth asking about, so don’t discount it.

Consider a Loan

A debt consolidation loan may also be an option for you. This type of loan program is designed to help you consolidate all of your debt, paying off your credit card balances and enabling you to make a single monthly payment instead of having to make several payments to different creditors. You may be able to include debt other than your credit card balances, which often makes a loan a great alternative to bankruptcy.

These 4 alternatives to bankruptcy may not all work for your situation, but there is a good chance of avoiding bankruptcy if you can work with your creditors and reduce your expenses. In order to put these plans into action, you will need to have a steady income that will help you to meet your new obligations. But following these tips, you will be pleased to see your financial situation improve quickly.

 

Tags: Bankruptcy, Credit, Credit card, Creditor, Debt consolidation

Category: Bankruptcy