by William Blake
No one wants to file for bankruptcy. You hear about big corporations doing it all the time. But corporations are different than an individual. Finding alternatives to bankruptcy can save you a world of trouble in the long run.
Think about a debt consolidation loan. Debt consolidation means that all of your debt is put together and a loan secured for the total amount. Creditors are paid what is owed to them and the bank that issued the loan is given a monthly payment that is within reason for the consumer.
Debt consolidation mainly includes unsecured debt. Examples could be credit cards, store credit cards, unsecured lines of credit and gas cards. Creditors have a more difficult time recovering unsecured debt as it’s not backed by any collateral.
You can go through an agency if a bank isn’t willing to consolidate your debt. Counselors will negotiate on your behalf as they are used to dealing with these agencies. In some instances you can have your debt dropped by as much as 60 percent. The agency takes care of the creditors and you make just one monthly payment to the agency.
Debt consolidation does not involve liquidating your assets. With bankruptcy proceedings, the court may rule that you have to sell your belongings to pay the creditors. Debt consolidation allows you to keep the things that you have and comes up with another solution.
Something else that you can do yourself is to get another income. It’s not the easiest thing to do but if it allows you to increase your credit card payment monthly for a year or two until it’s eliminated, it could be worth it. If you can’t manage a second job then maybe you can get some overtime at your current one. The key to reducing your debt is finding a way to bring in more money.
The second job can be a way to supplement your income while you are paying off a debt consolidation loan. Things come up without warning and you may need more cash than you have available. A second job will help you to save for a rainy day and still make payments on your debt.
Starting a home business is another option. Some home businesses can be started with little or no money if you don’t have time for a second job. Even selling items on eBay can bring in some extra cash when needed.
If you have a special skill you may be able to loan yourself out to others who could use your services. Use the extra money wisely to pay down your debt.
There are better alternatives than to file for bankruptcy. The alternatives that you pick don’t need to be forever, just until you can get yourself back on track financially.
About the Author:
For more practical advice for reducing credit card debt, check out the Debtopedia website at http://www.debtopedia.com. You’ll find lots more helpful advice to get rid of credit cards and other debts, while saving interest in the process.
