Things To Try Before Filing For Bankruptcy

Most Americans are living paycheck to paycheck, usually making the bills meet at the end of the month.  In fact most people are one check away from being homeless.  Most individuals are facing huge debts, with high interest rates, if this sounds like you, then you are possibly considering bankruptcy as a solution.  Yes, bankruptcy can be the answer for some and even help erase away debts, giving them a fresh start.  Before filing though, make sure you have tried alternative options to bankruptcy.

Why try alternative options?

Well for starters, bankruptcy is not the quick fix everyone is always looking for.  It is a time consuming process that isn’t right for all.  Sometimes it can take up to 10 years afterward to even get a decent credit interest rate.  Another issue, with the new bankruptcy laws you may not even get approved.  This can come as a real blow to someone who is looking to bankruptcy as a cure all.  Before filing, try some of the options below; you may just be glad you did.

Reorganize your debt

If you have a lot of debt, one options is to try and reorganize or consolidate it.  This means you take all of you payments and hopefully combine them into one payment with a low interest rate.  There are plenty of debt consolidation companies out there that will help you try and do this.  Keep in mind that having a good credit rating is helpful and necessary to get the low interest rate.  If you credit rating is low, you may want to consider a different option, because you payment may be too high to afford.

Sell Everything You Can

It is all the gadgets and trinkets you purchased, that got you into this mess, in the first place.  Sell off what you can, electronics, cars, designer clothing, even your house.  Do everything you can to save money and lower you monthly payments.  Look to ebay and other classifieds for selling items; try to raise the money to pay off your debt.  Most importantly as soon as you receive money from selling something, it is important to use it to make a payment right away, before you go and spend it on something else.

Work More

Try to pick up more hours at your job, or overtime if it is offered.  Look into a second part-time job; too make some extra cash for a while.  Even ask your boss for a raise, if you have been with the same company for awhile, don’t hesitate to do this, it may be better then finding time for a second job.  Look to other people possibly living in the house, can they contribute any extra money for a while?

Talk to Your Creditors

Call and write everyone you owe money to, tell them you are planning to file bankruptcy if they can not help you in some way.  A lot of credit card companies, will try and help, they want to get paid and if you file for bankruptcy they may not.  They can help lower your interest rate for a set time, or let you pay a smaller amount then what is due.

Talk to A Bankruptcy Lawyer

A bankruptcy attorney can go over the laws with you and let you know what your options are.  It is always good to talk with someone who is knowledgeable in the process, so you can be informed on what options may best work for you.

If you have tried everything on this list and still can’t make the payments at the end of the month, then it is time to consider bankruptcy.