Alternatives to Bankruptcy

In many situations, filing for Chapter 7 or Chapter 13 bankruptcy is not the best remedy for debt problems. There are some actions to take and things to do that can prevent the bankruptcy. Remember, filling for bankruptcy may look easy and you may think that will get the problems off your back but this is a very serious process that can affect your life and your pride. So look for alternatives to bankruptcy before taking a serious decision.

1. Stop the Harassment
Bankruptcy is not the best way to stop harassment from creditors. You can stop this by taking advantage of state and federal debt collection laws. These laws protect you from abusive behavior.

2. Talk and negotiate
If you have some income, you have proprieties or goods that can be sold; bankruptcy is not the right thing to do. You can negotiate with creditors, make a pay back plan and sell what you can. Negotiation can also save some time until you get a better financial situation .Also your creditors may agree to a lower debt.

3. Seek help
Many people are not comfortable negotiation with their creditors a pay back plan. If you are one of this people seek help to a nonprofit credit or debt counseling agency. These agencies can help you make a plan that will work for you and for your creditor.

4. Enter a debt management program.
Working with a debt counseling agency and participating in a debt management program is like Chapter 13 bankruptcy but with one BIG exception. There will be no bankruptcy on your credit record.
There also disadvantages when entering in such a program (you can have big problems if you miss a payment) so get informed. But overall this is serious alternative to bankruptcy.

5. Don’t act- do nothing
If you have a simple life and have little or no property (or income) you may chose to do NOTHING. If your life is simple and you want to be simple in the future this is one of the best options. Creditors will not sue you because they have nothing to collect.
A creditor cannot take away things such as basic clothing, ordinary household furnishings, personal effects, food, or Social Security, unemployment, or public assistance benefits. So unless you refuse to pay taxes you are pretty much protected