There are three obvious strategies to avoid bankruptcy:
First, deal with your debts on your own. This means you reduce your living expenses (or increase your income) and gradually repay your debts. If possible, you may consider a debt consolidation loan to repay your high interest debt, such as credit cards, and replace it with a lower interest bank loan.
Second, you can avoid bankruptcy through credit counseling. There are both not-for-profit and for profit credit counselors that will work out payment arrangements with your creditors through what’s called a debt management plan. You repay all of your debts in full over a two to five year period, often with little or no interest charges.
Finally, a formal legal settlement with your creditors may be an option. In the United States it’s called a Chapter 13 Wage Earner Plan; in Canada it’s called a Consumer Proposal; in Australia it’s called a Part X Arrangement. Regardless of where you live and what it’s called, a legal settlement with your creditors may be what you need to avoid bankruptcy.
Posted by Editor Bankruptcy Alternatives @ 10:42 pm