Is bankruptcy the only way out of debt?

Is Bankruptcy the Only Way to Get Out of Debt?

Consumers who are facing excessive debts must figure out the best way to settle their debts and avoid negative repercussions. Filing for bankruptcy could provide a faster solution for settling debts, but it has several negative repercussions including restricting the consumer’s access to new lines of credit. Reviewing 4 alternatives to bankruptcy could provide consumers with answers that are more efficient and don’t impose unwanted circumstances.

 

1. Credit Or Debt Relief Counseling

Reviewing credit or debt relief counseling opportunities might help the consumer create a plan for settling their debts without negative repercussions. The credit counselor can negotiate a deal with the creditors and create a monthly payment that is more affordable for the consumer. It isn’t the same as filing for bankruptcy where the consumer has a legal automatic stay to prevent a lawsuit. However, the credit counselor can help the consumer get a payment structure to lower the potential for legal action. Consumers who want to learn more about their options contact National Debt Relief now.

 

2. Debt Settlement Offers

Debt settlement offers enable consumers to pay up to 50% less than the current balance of the debt. Settlement offers are more possible when the account has been charged-off or owned by a collection agency. The consumer will pay a lump sum payment or monthly installments until the debt is settled. Once the consumer has paid the account off in full, they can request that the debt is removed by the credit bureaus. All listings for the debt are removed including the original listing posted by the first creditor.

3. Debt Consolidation Loans

Reviewing debt consolidation loans helps the consumer determine first if they qualify for the loan program. Lenders provide requirements for the debt consolidation loan including the lowest acceptable credit scores. If the consumer qualifies for the consolidation loan, they can pay off a larger portion of their debts at once. The lender can send the funds to the creditors directly and settle the debts for the consumer. The borrower will need to pay one monthly payment for the loan instead of several. It is a great opportunity for borrowers who can afford the monthly payments.

4. Selling Assets On Your Own

Selling assets to generate enough proceeds helps the consumer pay off their debts. Instead of filing for Chapter 7 bankruptcy, the consumer can approach the sales on their own and cut out the middle man. This gives the consumer full control over what assets are sold and how much money they accept for the assets. If the consumer were to file for bankruptcy, the court assigns a trustee to manage the sale of the assets and make decisions about what assets the court sells.

The consumer receives the exempted value for the asset and has zero control over how much money goes to each creditor. Making the choice to sell their assets on their own could take longer than the chapter 7 bankruptcy, but it could give the owner more time to increase their profits and take advantage of a better market.

Consumers aren’t limited to bankruptcy when managing high volume debt. Alternative measures are available to the consumers to settle their debts and avoid damage to their credit. Reviewing four alternatives to bankruptcy helps the consumer create a better plan to pay off their debts and maintain control over their own finances.

 

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