Avoid Bankruptcy with Bankruptcy Alternatives such as a Debt Management Plan
Living with any type of financial hardship is one of the most difficult things that a person has to deal with. Unfortunately, it is something that most people have to do at some point in their lives. However, there is a huge difference between having a temporary financial roadblock as opposed to dealing with long-term shortages of funds and serious debt. The latter can make it almost impossible to do things that most people take for granted, like having a roof over one’s head or eating healthy meals.
When people have to live this way for long periods of time, the stress can easily become so overwhelming that it is practically impossible to function normally, even in a day to day sense. This forces many people to contemplate filing for bankruptcy. Nevertheless, there are some other options that should be considered before anyone chooses to file for bankruptcy. In fact, that should be the last choice that a person makes in their attempts to regain some control over their finances.
Here are a few Bankruptcy Alternatives:
#1 – One of the first things that a person might consider doing is obtaining free credit counseling services from a reputable company. Many times, these types of companies will help a person with credit counseling that occurs before or maybe even at the same time that they are helping them consolidate their debt with a Debt Management Plan. The whole idea behind it is that people can get relief through a Debt Management Plan that will help them stave off the creditors and prevent additional collection activities, while simultaneously giving them a single payment to pay every month that is lower than what they were originally paying because of reduced interest rates. It can make it easier to pay off debts and it makes it easier to manage finances from one month to the next.
#2 – If that is not an option or doesn’t work out, a person may consider looking into getting a home equity loan. Provided that the home is paid off, or even that the majority of the original note is paid off, it may be possible to get a home equity loan in order to pay off high-interest rate debts. In many cases, this can help a person avoid the necessity to file for bankruptcy and allow them to get back on track when it comes to their finances. In addition, this is far less damaging to a person’s credit report and it can help them in many aspects of their life, not just helping them avoid filing for bankruptcy. It can help them create an emergency savings fund for the future so they don’t have to rely on credit cards.
#3 – Sometimes, simply contacting a company directly can help a person avoid bankruptcy. For anyone that is having problems paying off one or two accounts, it may be possible to contact those creditors directly and work out some type of payment plan. It is something of a long shot, but sometimes it pays off to try it.
#4 – If ALL of that fails to work, a couple of additional options to consider are a reverse mortgage or a second mortgage. If a person can realistically use these techniques to get out of debt and put themselves in a better financial position down the road, it might be worth doing.
Why You Should Try To Avoid Bankruptcy:
Bankruptcy is a scary thought. While it is sometimes an effective solution to debt, it can have dramatic implications on a person’s credit rating for up to a decade after it has been filed. Therefore, a person should only file if it is absolutely necessary. Other options should be considered first.
For many people who are trying to manage large amounts of debt, avoiding bankruptcy is a top priority. Debt can be in the form of medical bills, mortgages, credit cards, and loans. When these debts pile up upon one another, the results can be crippling, especially if the debtor suffers a job loss, a divorce, or an illness. Sometimes it can seem that filing for bankruptcy is the only option to get out from under the mess.
For some people bankruptcy may be their only option, but if you don’t have millions of dollars of debt, there may be alternatives available to help you repay your debt, maintain your credit score, and prevent future problems. A non-profit credit counseling agency like Advantage CCS hires experts who are able to guide their clients in the best possible ways to reconstruct their finances and get them out of debt.
Advantage CCS works with creditors to help clients work out a satisfactory repayment plan called a Debt Management Plan. They can lower monthly payments and help your credit score increase over time as you pay down your debt. They also work with clients to help them learn to properly budget their finances, keeping them from getting into debt again in the future.
Bankruptcy can result not only in a damaged credit score, but accounts can be frozen and interest can continue to accrue until a court ok’s your bankruptcy filing. With recent regulation changes, filing for bankruptcy is not as easy as it once was, and there is never a guarantee that a person will be allowed to file. Waiting several months for a judgment on your bankruptcy while not paying any bills can create an even bigger financial mess.
Discover Bankruptcy Alternatives with Advantage CCS:
Advantage CCS can work with clients to help them repay their debts. They may recommend that a client contact a bankruptcy attorney if the situation is very dire and the individual has no other options available to them, but it would be wise to know all the alternatives before resorting to a bankruptcy filing.
If you are suffering under massive debt that you can’t repay, contact Advantage CCS today. Certified credit counselors are available online, by telephone or in person. Advantage CCS is a national non-profit credit counseling service which means that the priority is the client, not the company’s bottom line.
Know all of your options before you decide to file bankruptcy. You may be surprised at what you discover. If you decide to file for bankruptcy, we offer Pre-Filing Bankruptcy Counseling and Pre-Discharge Bankruptcy Education classes. Both are required by law to be completed so you can obtain your bankruptcy certificate.