3 Options to Eliminate Debt Without Filing Bankruptcy

Bankruptcy filing should always be your last option when there is no other better option to resolve your overwhelming debt. But, you should not take a dramatic action to file it without exploring other debt relief solutions. Moreover, the new credit laws will require you to pay back the money you owe even though you have filed a bankruptcy. Therefore, you should always try to resolve your debt with other debt relief options. If you are about to hit bankruptcy, it does not hurt more to consider the 3 debt elimination options below before making a final decision:

1. Debt Settlement

Be aware that creditors don't want to you file a bankruptcy. They would rather get something than nothing. So, you may be able to settle your debt with a portion of amount you owe if you sincerely negotiate with your creditors and tell them about your financial hardship that may lead you to file a bankruptcy, unless they are willing to help you. You may face a lot of rejections, but don't give-up and call them as many times as you can to get them agreed to accept a negotiated settlement amount. Or, if you think you are not a good negotiator, then you can hire a professional debt negotiator to help you, but be aware that the fee is rather high. So, make sure the negotiator is able to get a settlement amount that is low enough to compensate the high fee he charges on his service.

2. Debt Consolidation

If you about to hit bankruptcy, your option to resolve the problem with a debt consolidation may be limited, but there is no harm to try because there are debt consolidation companies, which can help you to negotiate with your creditors and get them to lower your monthly debt payment at a more comfortable level by consolidating all your debts through the company. You just have to pay one monthly payment to the debt consolidation company and the money will be distributed to your creditors by the company.

Another option: If you have asset to be pledged for a secured consolidation loan or you can find a guarantor to apply for a loan to settle your debt, then you can consolidate all your debts into a consolidation loan and choose a longer repayment period to lower the monthly payment so that it is at your affordable level. But, be aware that you are putting your asset at risk, or the guarantor may need to bare you debt payment if you default the loan.

3. Debt Management Program

Credit counselling services are mostly non-profit organizations with the purpose of educating debtors about debt management. Most of their consultation services are free and you can use these services to explore your debt relief options other than bankruptcy filing. Most probably you will be proposed with a debt management program, which will be a better option than filing a bankruptcy. Although the debt management program involves monthly fee, if you follow the debt payment schedule in the program, you will be able to pay off your debt at the end of schedule. If you are concerned about the monthly fee is too high, try to ask whether it can be waived or reduced; if not, you can always approach other credit counselling services.

Summary

Remember that filing for a bankruptcy should always be your last option and you should not go for this option before exploring other debt relief solutions. The above debt elimination options are among the three which are worth for your consideration to get your debt resolved without the need to file a bankruptcy.