For many people, bankruptcy is the best answer to overwhelming debt, but that is not true for everybody. If you are questioning whether you want to put yourself into the position of having a bankruptcy on your credit report for several years, you might want to consider some of these other debt relief options.

  • Credit Counseling – For some people, out of control debt is less an issue of insufficient income and funds than it is simply not knowing how to manage their finances. If you fall into this category, then credit counseling can make a real difference. When you meet with a credit counselor, they will sit down with you to review all of your debt and your available income, advising you as to how to cut down on unnecessary expenses and spending, prioritizing high-cost debt as the first that needs to be paid and helping you to create a budget and plan that will allow you to get out from under your bills. They will often contact your creditors to see whether they can negotiate a reduction in rates or extend payment terms to make repayment easier for you.
  • Consolidate your bills – Debt consolidation is a step that combines all of your outstanding debt into a single debt. This essentially restarts the clock and eliminates varying interest rates, giving you a single monthly payment to be made and managed. You can arrange to consolidate your debts in a number of ways, including taking out a personal loan from a bank with which to pay off existing debts, then only needing to pay the bank back; or combining all of your debt into one credit card.
  • Debt settlement – This type of debt relief is managed by a debt settlement company, which essentially arranges for debt consolidation on your behalf. The process involves discontinuing your payment of your debts and instead making payments into an escrow account that will grow to the point where the company can offer to accept the amount that you’ve saved up to discharge your debt. For many creditors, taking something is better than taking nothing, especially as it allows them to discontinue costly collection efforts and to write off their loss.
  • Fair Debt Collection Practices Act – If you’re less concerned about your debt then you are about the annoying or intimidating phone calls you’re getting from collection agencies or your creditors themselves, this law gives you a potent weapon against them, keeping them from calling between the hours of 9 p.m. and 8 a.m., preventing them from using abusive language or threatening you with violence, and forbidding them from calling you at work if that is against your employer’s standards, among other things.

If none of these debt relief options seems right for you, or if you’re still unsure our team can help you sort it out. Contact us today for more information and find out if bankruptcy can help you! 

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