Before Considering Bankruptcy Try These Things
Filing for bankruptcy is an extreme move, not a quick fix. It's
a long, painful process with a huge stigma, and you're unlikely
to be able to get any kind of credit for ten years afterwards.
Yet bankruptcies are on the rise. Out of ignorance or stupidity,
more and more people seem to be using bankruptcy as a first
option, instead of a last resort. Before you do it, make sure
you've considered every alternative.
Have You Reorganized Your Debt?
If you haven't tried debt consolidation or negotiation, you
really should. Yes, you'll have to pay back your debts
eventually, but surely that's better than bankruptcy, isn't it?
Sell Everything You Can.
It's better to sell everything you own than it is to go into
bankruptcy. Move to a smaller house. Sell your cars and take the
bus. Take a good, hard look at your life, and realize that there
are very few true 'basics': you can do without almost
everything. Your house is probably full of quite valuable things
that you never use, so bite the bullet and get rid of them. In
short, subtract your debt payments from your income, and live
like someone who earns that much.
You are going to lose almost everything you own if you declare
bankruptcy, so you might as well try to sell it yourself at a
better price and avoid the bankruptcy issue altogether.
Work More.
If you can get extra hours, do it. Being bankrupt is such an
indignity that you should at least try going to your boss and
asking for a pay rise or promotion. After all, the worst they
can do is say no. They're going to find out about it anyway if
you declare bankruptcy, and they might wonder why you didn't
come and ask for their help. Also, if you're married and only
one of you works, try to get the other a job - you never know,
it might even be fun!
Use the Power of Threats.
One of the best things to do when you're considering bankruptcy
is to write a letter to absolutely everyone you owe money to,
letting them know. Make it a very clear threat: "if I cannot
find a way of paying my debts then I will be forced to file for
bankruptcy". Most creditors would rather let you pay back a tiny
fraction of what you owe than have to try to get money out of a
bankrupt.
Know Your Local Laws.
Bankruptcy laws vary enormously depending on where you are.
There are some places where you'll be forced to give up
everything you own to pay your creditors, some places where you
at least get to keep your house, and some where you can declare
yourself bankrupt and not even notice! Try to get a lawyer - you
might think that you can't afford one, but many will work 'pro
bono' (for free) for people who really need a lawyer but can't
pay.
If you still cannot see the light at the end of the tunnel or if
you are just looking for some advice on how to best remedy your
situation you make want to seek out credit counseling.
About the author:
Gregg Hall is a business consultant and author for many online
and offline businesses and lives in Navarre Florida.
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