Are there alternatives to bankruptcy?
Full Question:
Answer:
Yes, there are alternatives to filing bankruptcy. Anyone considering filing bankruptcy should first evaluate all of the potential alternatives, and then make an informed decision regarding whether bankruptcy is the best choice. It should be stressed that this is a personal decision for each individual. There is no one answer that is right for everyone. Only by carefully exploring all of the alternatives may a person truly know whether bankruptcy is the best solution to their debt problems.
Prior to making a decision to file bankruptcy, each individual should first attempt to contact his or her creditors and determine whether it is possible to obtain their cooperation in working out a different payment schedule. Most people would be surprised to learn that creditors often are willing to make reasonable modifications to assist the debtor in repayment. Communication and honesty are the key words here. In exploring this option, the creditor should be honest and forthright with the creditor regarding one's financial situation.
The debtor should also take a close look at his or her assets. If any have a resale value, consider whether a sale of those assets and the application of the proceeds of the sale to one's debt may reduce the debt to a more manageable level. Often, after the sale of one or more personal assets, debt is reduced to a level which makes bankruptcy a less attractive option.
Another option to explore, which may not be available to every debtor, is a consolidation loan. It may be possible for some debtors to obtain a consolidation loan to repay one's debt, which very often will result in lower overall payments.
Another option to examine is Consumer Credit Counseling Service. CCC is a nationwide nonprofit organization that attempts to work with both the debtor and his or her creditors to devise a more manageable repayment plan. This service very often results in revised payment plans which are acceptable to both the debtor and the creditor, thereby eliminating the need to file bankruptcy.
