The bankruptcy process can give you a new beginning, but it’s not appropriate for everyone. Take into consideration the severity of your debt and your financial goals for the future before you file. Alternative solutions can often result in more manageable outcomes, and you can keep your credit in good standing.
Reduced expenses and negotiating with creditors is an excellent option to avoid bankruptcy. This strategy should be done before filing and requires careful planning and budgeting. If you are able to cut your costs or negotiate lower interest rates, the savings can be applied toward paying down your debt.
You can lower your debt by selling assets. This will help you to pay off your debts and could keep you from having to make an application for Chapter 7 bankruptcy. Before selling your assets, you should consult with a bankruptcy lawyer to ensure that you are eligible for this type of relief.
In bankruptcy the court will “discharge” or “erase” the majority of unsecured debts which include credit card charges, medical bills, late utility bills and personal loan. Certain debts, like student loans, recent tax, alimony, and child support, will be able to survive bankruptcy. A good strategy before filing for bankruptcy is to concentrate on erasing non-priority unsecured debt and then putting any money saved towards the more expensive debts that can’t be eliminated by bankruptcy.
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