What Are Some Alternatives to Bankruptcy?

Close-up of a bankruptcy petition

People who have serious debt may be considering filing for bankruptcy. Most people will only want to declare bankruptcy in severe circumstances, as it has a negative association by many, and stays on your credit report for years after. However, bankruptcy is a great solution to start building up positive credit after financial troubles for many people. Before declaring, exploring alternatives to bankruptcy may be recommended.

Alternative Options to Bankruptcy

  • Debt renegotiation: Many loan providers may let you negotiate more affordable loan terms so you can meet your payment deadlines. You can ask for lower monthly payments spread out over a longer length of time.
  • Debt consolidation is the process of rolling multiple debts into one debt with a lower interest rate. For example, combining credit card debts onto one card with a lower rate, can help people repay debts.
  • Credit Counseling: Many non-profit agencies are dedicated to help people address their financial issues and help create a better financial profile for them.

Many people could be in serious debt problems that are caused by predatory lending practices that are illegal. A New Jersey bankruptcy attorney can review your loans to make sure lenders are following laws, and determine if a bankruptcy alternative option is right for you.

 



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