A bankruptcy can be a chance to get a fresh beginning, but it’s not the best option for all people. Before you file, consider the extent of your debts and your financial goals for the future. Alternative options can produce more manageable outcomes and can help keep your credit in good standing.
The reduction of expenses and negotiation with creditors is a great option to avoid bankruptcy. This strategy is best done prior to filing and requires careful planning and budgeting. If you can cut down on your costs or negotiate a lower interest rate the money you save can be used to pay down your debt.
You can lower your debt by selling assets. This will help you to pay off your debts and may help you avoid having to declare Chapter 7 bankruptcy. Before selling your assets, you should consult with a bankruptcy lawyer to ensure that you are eligible for this kind of relief.
In bankruptcy the court will wipe out or “discharge” the majority of debt that is unsecured such as credit card payments medical bills, overdue utility bills, and personal loans. Some debts, such as student loans, tax owed or alimony payments, as well as child support, will not be affected by bankruptcy. Before filing for bankruptcy, it’s recommended to eliminate any non-priority debts, and then make use of the money saved to pay off more costly debts that aren’t going to be eliminated through bankruptcy.
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