This is not an article that aims to give legal advice with respect to avoiding bankruptcy and looking for other alternatives to filing for bankruptcy. Moreover, we deal with the circumstances of an average consumer and not somebody with extraordinary needs or demands.
Bankruptcy and Paying of Debts
There are people who think that filing for bankruptcy means you are free from your responsibilities as a debtor. This is not necessarily true because you might still have to pay your debts. This is why avoiding personal bankruptcy is the option to consider, if there are personal bankruptcy alternatives.
It must be remembered that, there are occasions when people get away with it but there are common scenarios wherein your credit is not only affected by about 7-10 years but you also have to pay a part of the debt.
The Top Alternative to Bankruptcy
Debt Settlement is one of the more common ways to avoid bankruptcy. Herein, expert negotiators work with creditors to reduce the amount owed by the debtor, who is now a client of a debt settlement company.
It’s a great option when it comes to debt relief, for people who have fallen behind on their instalments on account of reasons beyond their control.
Another Substitute for Bankruptcy
Credit counselling involves the lowering of the interest charges levelled by the creditors. Taking this route, you will be free from debt in as little as five years or so. At times, creditors are reluctant to provide relief in this regard, as this monthly interest payment funds their operations.
In such cases, it becomes difficult to avoid bankruptcy.
The Chapter 7 Bankruptcy Alternative
All the unsecured debt obligations of a consumer/client are cleared under this option. However, the consumer must turn over his/her property to the courts, who would then sell it, to give the proceeds to the creditors.
If you have no income, but have some kind of property, then it is the ideal solution for debt relief and to avoid bankruptcy.
There are more bankruptcy alternatives, like Chapter 13 bankruptcy and the liquidation of assets. If you want to avoid debt bankruptcy, you should consider all these options closely.