Bankruptcy, due to its negative impact on credit for such a long period of time, should be a solution only when all other means for paying off debt have been considered. There are many solutions that can be considered in conquering the debt trap without impacting your credit negatively. Taking an alternative route must be a long-term commitment on your part, so weigh all your options before making a decision.
Selling Property Can Provide Solvency
In order to move forward with paying off debts, sacrifices will have to be made. Whether you have a tighter budget, or resolve to sell valuables for extra cash, it is important to take responsibility for fully repaying what you have borrowed to creditors. This is a great first step, even if bankruptcy is in consideration, because it will maximize the value you can get for property without having it dissolved by the courts. Selling property should be every borrower’s first step in resolving issues with debt.
Debt Consolidation Provides Relief
One way to settle your debt without losing any of your property (or assets) is to make arrangements with creditors to repay your debts using a single loan payment. This is usually negotiated through a debt counselor and managed by such a firm. By consolidating your debt into a single payment, there is much stress relief that can be removed from the overall process.
Debt Settlement Provides Resolution
Another way to settle your debt is to negotiate directly with creditors to reduce and/or elongate payments so that repayment is more sustainable. The benefit is that you maintain relationships with creditors and can find resolution without severing a bridge that could be useful in the future. If you have a small number of creditors to manage, this is a better solution than consolidation.
Refinancing A Mortgage Frees Up Cash
Restructuring, or refinancing, a mortgage is one way to save money on the front end that can be used to pay down debts using one of the aforementioned methods. Restructuring means negotiating a temporary payment alternative that frees up some of your liquid cash, while refinancing extends your terms over a longer period of time and, ultimately, lowers your house payment permanently.
Borrowing Money May Be A Solution
When all else fails, simply getting creditors off your back can provide great relief. A solution to consider when you’ve done all you can to repay what you owe, is to borrow money from family and friends. Of course, repayment is still necessary, but the pressure will be less prevalent and your credit can remain intact.
Unfortunately, not everyone has the ability to borrow money, negotiate with creditors, or afford consolidated payments. Some may not even have property worth enough to resolve debt obligations. Therefore, it is always within your reach to file bankruptcy. We advise that, if none of these options work for you, to seek an attorney’s or debt consolidator’s assistance in making a final decision.