Bankruptcy Alternatives Online - An Alternative for Non-Business Bankruptcy
Avoiding court by investigating bankruptcy alternatives
If you are panicking about exploding debt, or you feel you are falling behind on your bills, there are a number of bankruptcy alternatives to explore before you make the decision to file in court and wear the scarlet 'B'.
Begin by talking to your creditors. They will probably understand if something has come up - a medical emergency, a business set-back or job loss - and be willing to work with you to resolve your debts. Try to work out a compromise - perhaps you might be able to settle your debt with a smaller cash payment, or suggest a new payment plan with lower amounts stretched out over a longer period of time. It might be possible to erase late and/or penalty fees, or to even temporarily suspend payments. Your creditors should be willing to work with you on formulating bankruptcy alternatives, rather than attempting to fight the courts themselves in a full bankruptcy case.
If you have a retirement savings plan, or own your own home, you can consolidate your debts with a consolidation loan. This means you take out one large loan in order to pay off all the numerous smaller debts you may have incurred. Be wary when making this decision because if you decide to place a second mortgage on your home in order to get the consolidation loan, this ups your chances of ultimately losing your house.
It often makes financial sense to seek expert advice before making any decisions. Contact a debt counseling service, whose purpose is to help people in exactly your situation. Don't fall for a scamming online service that requires payment, when there are a number of non-profit and government-sponsored national organizations available to help:
- The Consumer Credit Counseling Service offers financial assistance and advice at www.cccs.net
- The National Foundation for Credit Counseling, at www.nfcc.org, uses their services to promote "financial wellness." They also offer debt advice at www.debtadvice.org
- The non-profit organization Springboard offers counseling, correction, credit education and debt settlements. Check them out at www.credit.org
- The Federal Trade Commission provides a wide range of financial information and credit help, as well as instructions on how to obtain free credit reports at www.ftc.gov .