For most of the consumers debt is an integral part of their life. They hunt for loans running from one investor to the other. But finally land up saying that they are unable to repay the loan. In this case they seek the remedy by filing bankruptcy, which really affects them in many ways. Please find the following ways in which you can avoid filing bankruptcy and save your credit scores.
Sell all the liquid assets you have and use the money to repay your debts. When you feel that you cannot afford to pay debt installment, be smart and act quick, as it would be very difficult for us to act if the creditors start hunting for payment. We can choose to sell our furniture and fixture, jewels, electronic gadgets, vehicles and get the cash inflow, which could be used for the debt repayment. This would surely avoid filing bankruptcy and also spare the credit score.
Even if you file bankruptcy we need to repay our debts over a period of time. This is in the case of chapter 13 bankruptcy filing and also in the chapter 7 bankruptcy filing when the debtor fails to pass the means test. So why should we file a bankruptcy, get our credit score affected and also repay the money. Instead we can be shrewd and start repaying the money by increasing the money flow.
- One can go for additional jobs in their free time
- One can raise money out of their hobbies or skills during the week ends
- We can cut certain expenses such as landline, mobile phones and satellite connections. This does not pain us much but would impact the cash flow.
It is always wise to seek creditors’ assistance before filing bankruptcy. They always wish to get at least lesser payments from us than no payments at all. Inform your creditors that you are in a financial drain but would wish to avoid bankruptcy.
Expose your willingness to repay the debt and seek their help in the easement of the monthly payments either by decreasing the monthly installments or lowering the interest rates or both. All the credit companies have the options like these.
If the plan of working out with the creditors does not work properly, there is always an option of getting the assistance from a consumer credit counselor. He would surely help us making our payment plans more comfortable. Also the new bankruptcy code makes it mandatory to get assistance from a credit counselor before filing bankruptcy.
Getting help from kith and kin
Generally it is a very bad idea to borrow money from our own friends and relatives. This would end up in quarrel and would even end our relationships with them. But it is better to borrow from them instead of filing a bankruptcy. Before borrowing draw up a plan and explain them as how and when are we to repay them once we are through with this financial draining.