Five Financial Options to Look at Before Bankruptcy

Saturday, February 20, 2016, PM | Leave Comment

When looking at serious debt, it can sometimes be a little difficult to see which way to turn. If you are already entertaining the thought that bankruptcy may be the option you need, take a few minutes and see if you can use one or more of these ideas as an alternative. 

Five Financial Options to Look at Before Bankruptcy

  1. Renegotiate Your Debt

    Oftentimes, creditors understand that people can run into financial difficulties and will give them some time to catch up when things return to normal.

    According to Assurance Financial Group, often by contacting your creditors, you may be able to arrange for temporary lower payments and possibly even lower interest rates. It could end up being just the break you need.

  2. Borrow from Relatives

    If you have any relatives who may have money to lend you, this could be your best option. It is possible they may loan you (or possibly even give you the money as a gift) the money needed until you can get back on your feet again.

    This could work well because you may also benefit from low or even no interest.

  3. Balance Transfer Credit Cards

    If your credit is still intact and not too large, you may be able to consider getting a balance transfer credit card. This type of card enables you to transfer balances from other credit cards and will often give you as much as a year or more with zero interest.

    This is especially beneficial if you can pay it off within the zero interest period. Remember that after that period the interest could be rather high.

  4. Take out a Personal Loan

    Obtaining a personal loan from a lender can work well if you can pay off all your bills with higher interest with the loan. This will give you one easy monthly payment with lower interest and lower payments.

  5. Borrow from Home Equity

    The possibility of borrowing from the value of your home is one source that people often look to when in debt. If you have enough equity in your home, then it certainly could help you.

    Something you want to think about before you take that step, however, is that it puts your home at risk. If you cannot pay your bills on time – you could lose the roof over your head. Other options should be considered first if available.

Bankruptcy should only be considered as an option after other avenues have been sought for and tried. Because of the fact that it will stay on your credit report for at least seven years, and will hurt your ability to get much credit, it should be avoided if possible.

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