Alternatives to Bankruptcy

Although bankruptcy is often the best choice for people with debt problems, it is not always the case. It is beneficial to look through the options before deciding which debt remedy is best for you. Bankruptcy has many benefits, but it is also very permanent; as a result, at least looking into the other options can be worthwhile.

The first step in beginning the process of fixing debt is knowing your situation. It will help you – and come in handy in later steps – if you make a list of your incomes, expenses, assets and debts. That way you can know how manageable your current situation is and what remedies may work best.

Once you make a list, the easiest thing you can do to try to help erase some of your debt is talk to your creditors. Often, creditors will be willing to negotiate to help you pay the debt, and sometimes they may even reduce it. This makes sense for them, because getting some money back is better for them than you filing for bankruptcy, in which they may not get any repayment. Even if this is not enough for you, knowing your financial situation and negotiating with your creditors is a good start to at least get more time.

The next thing you can do is schedule a meeting with a credit counseling agency. This is a necessary step in the process of filing for bankruptcy, but others can take advantage of it to try to sort out their finances without resorting to bankruptcy. They will help you organize your finances so that you can better pay your debts.

If your problem is that you just do not have the financial situation necessary to make your payments, then you may have resolution as well. If you do not have many assets outside of necessities – your home, a car, clothes, and so on – then you may as well not file for bankruptcy. Your creditors will most likely not try to collect on your assets, since most of them will either be protected or of not much value. So, you may be best off by not doing anything. Again, you may want to meet with a credit counseling agency to determine whether your debts are okay for you to sit on.

Before filing for bankruptcy, you should consider all your alternatives and get as much information as possible. Since bankruptcy is such a permanent move, it should usually be a last resort, even if it is your best option. Following these steps in trying to resolve your debts may be the best place for you to begin.

Graham Billings

Graham Billings

Graham Billings is a senior at the University of North Carolina at Chapel Hill with a double major in Economics and Political Science. He plans to graduate in December of 2009 and then attend law school in the fall of 2010. He is a member of the Economics Club at Carolina, which brings in speakers and hosts events in order to discuss current economic issues and help those who do not have a background in economics become more familiar with it. He is a National Merit Scholar and Dean’s List recipient. He is originally from Greensboro, North Carolina and attended the Early College at Guilford for high school, taking classes at Guilford College. In addition to economics, his academic interests include the legal and political system. He headed the only student-run, high school-level Honor Court in high school and participated in a national model Congress in San Francisco, run by Harvard students, and won awards of excellence for his work on the mock Supreme Court. Additionally, he tutors Carolina students in economics on a volunteer basis.
Graham Billings

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