Bankruptcy Alternatives - Know Your Options
Michalis 'BIG Mike' Kotzakolios
Kotzakoliou, SSA

Before you file bankruptcy it may be wise to look into the bankruptcy alternatives available to you. Filing for bankruptcy will be with you for up to 10 years and may not be as easy as you wish it to be.

Contact your creditors first and explain why you are having trouble making your payments. Instead of filing bankruptcy, you may be surprised how many creditors will work with you. They are willing to cooperate, because they make more money keeping you as a long-term customer. They know bankruptcy alternatives; will mean more profits in the end.

Another bankruptcy alternative is a debt consolidation loan. A bank or financial service can combine all your debts into one easy loan payment. This consolidation loan bankruptcy alternative will pay off all your debts. Take time to shop for the best interest rate because lenders are very competitive for your business. It's a good idea to stop all further purchases using this bankruptcy alternative. Remember the reason you're considering bankruptcy in the first place.

You can also try a informal proposal as bankruptcy alternatives. In many cases you can work with your creditors to set up on easy monthly payment plan. This can sometimes be done without affecting your credit rating. The informal proposal bankruptcy alternatives are very similar to debt consolidation loans, but you do not borrow money to pay off your creditors. You simply negotiate a win-win situation as a bankruptcy alternative. You do not have to tell creditors you are considering bankruptcy. They already know it may be in their best interest knowing bankruptcy has spun out of control in the United States. These creditors know bankruptcy alternatives are more profitable to their bottom line.

Consider a debt workout is when an attorney contacts your creditors and make arrangements, which would require you to make some payments to them. Usually the payment will be less than if the account is settled in full with this bankruptcy alternative. Sometimes the arrangements will call for payment in full, but over a longer period of time than originally stated in the loan agreement.

There are many bankruptcy alternatives available to you. Take the time to look into all your alternatives before filling bankruptcy. 10 years can be a long time when you may have dreams of owning a new home or car. It's wise to look into bankruptcy alternatives that you can do to help your credit situation.