Alternatives to Filing Bankruptcy

Filing for bankruptcy can be a difficult and complex legal process. When someone files for bankruptcy, they have to apply for a court judgment to say that they can no longer cover their financial commitments. The process can be costly and after all of this, there is no guarantee that the court will actually grant bankruptcy if they consider you are still capable of paying for your bills.Even if bankruptcy is granted there are still some costs that remain such as child support, student loans, alimony and taxes secured by liens. Bankruptcy can also stay on your credit history for up to 10 years. During this time, it will be extremely difficult to get a new mortgage, loan or even a credit card. So for those that consider bankruptcy as a way out of paying for debt, it may also be a 10 year sentence to very bad credit.There are alternatives to bankruptcy. You may find that you can save a lot of costs by coming to private arrangements with your lenders or suppliers you owe. This will give you extra time to get your finances back on track.For individuals who are struggling month to month with their bills, or suddenly find themselves in debt because they have lost their job, it will be far better to find a way of paying debts other than filing for bankruptcy. Even before considering bankruptcy you will have to find out the true state of your finances and find out if there are any ways you can pay for you debts. You must do this, because the court will be asking the same questions.For business owners that are struggling with their business, it’s highly recommended to get advice to avoid filing for bankruptcy. This may mean you have to put a stop to your debts going out of control and find a way to close the business in the most cost effective ways.Think of your alternatives:Cut your costs to a minimum.Start a strict budget and stick to it.Explore all other sources of income such as extra work, a better job, getting help from other people like family members or a debt consolidation loan.Remember that filing for bankruptcy may mean you have to find another way to budget and repay your creditors anyway, so the earlier you can do this by yourself the better. Also, make sure that whatever you do doesn’t turn out to be a quick fix that leaves you in more trouble in the future.

Leave a comment