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aimz · 04-01-2007

Filing for bankruptcy can seriously impact your credit rating well into the future, making it difficult to finance a home, get a low interest credit card, or any other sort of financial help. It can take years to repair your credit record, so it is important to use bankruptcy only as a last resort, when all other avenues of repayment have been exhausted. Here are some tips to help you to avoid this harsh option.

Negotiate with your creditors. Creditors want to be paid. Call and explain your current situation and why you've missed payments, why you are unable to make those payments and any other situation that may affect your ability to meet your payment requirements. In many cases, creditors understand that some people have financial difficulties and will work with you to come up with a more reasonable payment plan. Most creditors will appreciate your honesty, over simply deciding not to pay without explanation.

Visit a credit counsellor. In most cases, a credit counsellor is required for filing for bankruptcy. They can help you make better money management choices and work with you to develop a repayment strategy. They could, in some cases, also help to negotiate better repayment terms with your creditors. Many credit counsellors are non-profit, so you may be able to find one that fits your financial limitations.

Try debt consolidation. If you have debts from many different sources, you may be able to consolidate your debt through a debt consolidation loan. These loans often carry a high interest rate, but they package all of your debt into one lump sum, which should allow you a much better chance at paying it all off a little more easily. A home equity loan may be ideal in this case, with rising real estate prices driving up equity in most peoples homes. The interest on a home equity loan is also tax deductible, so there is that added bonus that comes along with it.

Consolidate your credit cards. If you are carrying balances on multiple credit cards, consolidate them all onto one card at the lowest rate. This will allow you to rid yourself of higher interest cards and bring all your credit card debt under one card, which should help to lower your payments.

Sell your home. This might not be an attractive option to most and should only be an option if you do not have much equity available for a home equity loan. The alternative, however, could be foreclosure, so this could potentially be the only logical choice.

04-01-2007	#1 (permalink)
aimz Junior Member Join Date: Apr 2007 Posts: 10 Rep Power: 0	How to avoid Bankruptcy Filing for bankruptcy can seriously impact your credit rating well into the future, making it difficult to finance a home, get a low interest credit card, or any other sort of financial help. It can take years to repair your credit record, so it is important to use bankruptcy only as a last resort, when all other avenues of repayment have been exhausted. Here are some tips to help you to avoid this harsh option. Negotiate with your creditors. Creditors want to be paid. Call and explain your current situation and why you've missed payments, why you are unable to make those payments and any other situation that may affect your ability to meet your payment requirements. In many cases, creditors understand that some people have financial difficulties and will work with you to come up with a more reasonable payment plan. Most creditors will appreciate your honesty, over simply deciding not to pay without explanation. Visit a credit counsellor. In most cases, a credit counsellor is required for filing for bankruptcy. They can help you make better money management choices and work with you to develop a repayment strategy. They could, in some cases, also help to negotiate better repayment terms with your creditors. Many credit counsellors are non-profit, so you may be able to find one that fits your financial limitations. Try debt consolidation. If you have debts from many different sources, you may be able to consolidate your debt through a debt consolidation loan. These loans often carry a high interest rate, but they package all of your debt into one lump sum, which should allow you a much better chance at paying it all off a little more easily. A home equity loan may be ideal in this case, with rising real estate prices driving up equity in most peoples homes. The interest on a home equity loan is also tax deductible, so there is that added bonus that comes along with it. Consolidate your credit cards. If you are carrying balances on multiple credit cards, consolidate them all onto one card at the lowest rate. This will allow you to rid yourself of higher interest cards and bring all your credit card debt under one card, which should help to lower your payments. Sell your home. This might not be an attractive option to most and should only be an option if you do not have much equity available for a home equity loan. The alternative, however, could be foreclosure, so this could potentially be the only logical choice.