By Evan Vitale
Before you throw in the towel and move into the mind frame that bankruptcy is your only way out, there are some considerations and options that you should consider in avoiding bankruptcy.
Yes, for some, bankruptcy is the only answer. However, many people choose bankruptcy as the only “fix all” option. Bankruptcy should never be your first choice. It should only be used when you have fully exhausted all other options. Remember, in some cases, bankruptcy could mean loss of your home, automobile(s) and other personal assets along with severe limitations to your credit.
Discuss your options with your attorney. In some cases, your law firm can help you work out a payback plan, reduce penalties and interest and, perhaps, negotiate a settlement so you can pay back your debts quicker.
Debt consolidation; debt settlement and/or agreements with creditors are all in your best interest. In almost all cases, creditors are willing to work out a payment plan rather than force you into bankruptcy. Some individuals have been able to work out a payment plan on their own or with the assistance of a non-profit credit counseling service.
The best way to avoid bankruptcy is by practicing responsible financial management. Live within your means. Cut your expenses, especially in the areas of entertainment (movies, eating out, cable TV, etc.) and eating out (i.e., take your lunch with you to work). You can do it if you really put your mind to it and look for ways to cut your costs. You’ll feel better about paying off your debt and, eventually, you’ll be back on your feet financially. Over time, your credit will improve.
Remember, bankruptcy is a very serious matter and it stays on your credit record for up to 10 years. Be sure you consult with an attorney specializing in bankruptcy before making any quick decisions about bankruptcy.