Some of these alternatives will save you from bankruptcy and save your credit, it’s best to take it, even though it does take a little longer to get out of your debt, or cost a little more.
If you ultimately have to file bankruptcy, you can have peace of mind knowing you explored the alternatives. Once the process is complete, you can work toward rebuilding your credit score.
Here are the 4 tips to avoid bankruptcy and spare your credit.
1. Selling Some of Your Assets
Sell everything you can spare, and use the money to repay your debts. If you note you can’t afford to make payments immediately take action. When you wait on payments until you’re behind, it could be too late to get caught up and prevent your creditors from taking any further action.
2. Pay Your Way Out of Debt
When you take a closer look at your spending, you could be able to cut some nice-to-have ones like cable or satellite television, landline, and mobile phones. Those are examples of certain costs that you can cut without undue pain.
3. Ask Creditors to Help You Bankruptcy
Your creditors would rather see you get any money than no money at all. Let your creditors know you are suffering financial difficulty and want to escape bankruptcy.
Most credit card companies and banks have hardship programs designed for this kind of situation.
Make sure your monthly payment and interest rate actually go down before you start a hardship program. Otherwise, an even higher minimum payment could stick you.
4. Get Help from Family and Friends
Normally, borrowing money from family and friends is a bad idea. It’s been known to create hardships and even end relationships.
Consider carefully how much you can contribute to your debt, then ask friends and family to help make up for the difference.
Once you turn out to meet them with your savings, come up with a plan for how you can repay them once the financial condition turns around.