Five (5) Top Alternatives To Personal Bankruptcy

“America is in the midst of bankruptcy crisis” says a former U.S. senator. Since U.S bankruptcy laws were established a centaury ago, some twenty millions Americans have filed for personal bankruptcy, and more than half of this have done so since 1985. By the middle of 1998, bankruptcy filings were estimated to be 1.42 million since the last one year. Why the attraction? Why the astronomic figures? Alan Greenspan of U.S. Federal Reserve had this to say: the dramatic increase in bankruptcy can be partly attributed to changes “in the stigma associated with the issue of going bankrupt”.

Whatever is the case, bankruptcy should not be so attractive considering that after effect can be wormwood. At this time your may have become insolvent and are considering filing for personal bankruptcy. Please before you proceed with your plan, stop, think and consider the following.

Change your attitude

The first and the most important step in this direction is to change your approach to financial matters. A critical self-examination is imperative. This is so because, even if you file for bankruptcy and discharge your debt today, that does not mean getting out of debt forever without a substantial change in orientation and thought. Many bankruptcies today do not result from insufficient pays, but inability to control one’s spending. This can be seen in the fact that America are more prone to filing bankruptcy more than any other nationals. Therefore, a change toward a more financially responsible lifestyle is a viable Alternative to personal bankruptcy.

Debt consolidation

This is a process that allows you to consolidate your debt to a single creditor. This new creditor borrows you money to pay debts that are already matured. The main advantage of these is that you pay off several creditors. This gives you a clean bill of health financially because your debt now is new one and you have more time to pay. To enjoy this service you must develop a concrete plan of action. When he see how plan to settle you debt he be more incline to assist, even improve the quality of your proposal. A debt consolidator understands your situations better. He is also more experience in debt management, therefore can give the needed support. When this is done it is advisable to pay off higher debt and also the one with highest interest rate. The latter especially should be considered first.

Dispose some belongings

It is better to sell your house, if you own one than to go bankruptcy. Selling off your house does not in any way reflect poor judgment. It may be possible to pay off your debt and buy a small house. You could also dispose some of your cars, if you have more than one. There people who had sold their only car to avoid personal bankruptcy.

Bankruptcy is not only a legal matter. It also involves morality and our conscience. At the point of purchase we promise to pay at due date, that only is sufficient reason to try as much to pay our debt. If you were buried under a landslide, you would use whatever mobility you had to start digging yourself out. It may be slow, but it works. Remember, no matter how lo0ng or how difficult it may be to do it, getting out of debt is well worth it. Apart from the fact that bankruptcy leave a blemish that will take years to remove, the effect of on others are enormous.

Consult debt counselor.

The main duties of debt counselors are to give sound advice, tailored to your peculiar financial situation. He is able to give advice and recommendation that can stand the test of time. A debt counselor is more experience than an individual debtor. He is exposed to different financial problems on a daily basis. He thus could leverages his experiences and proffers solution to your financial burden.

Discuss with your creditors

Creditors are not sure whether they will get their money when a debtor becomes bankrupt. This put a greater pressure on the business. Therefore, creditors are always happier when you discuss and negotiate your debt burden with them. Remember, they want to know what you are doing. Keep them informed. The one thing no creditor will tolerate is silence. Silence is quickly interpreted as indifference or refusal to pay. They will really accept lesson amount they are sure of getting then what they are not sure of. As the sayings goes: “a bird in hand worth more than thousand in the bush”. This saying had more meanings to those leave around or had visited a tropical rain forest. So do creditors when this had been done pay the remaining.

There are compelling reasons why you should seek alternative to bankruptcy. If you take pleasure in getting out of debt through bankruptcy, you may be tempted to go bankrupt again. Bankruptcy dents serious blow on your financial rating. Do not forget, bankruptcy is not a wholly legal matters, it involves morality, fidelity and integrity