No one considers filing for bankruptcy to be a great idea and even top attorneys would suggest you consider it as a last resort. For most, the disgrace, guilt, and fear of bankruptcy are enough to find alternate solutions and, to top that, it literally puts your credit score in tatters. Avoiding bankruptcy is the priority of many people, even if they have to take extreme measures.
It might be easier to overlook the repercussions of bankruptcy as a bystander; ask anyone who has had to face this situation. Therefore, you should seek all possible solutions before taking such an extreme step. Here is a list of certain possible alternatives that you can explore before taking that route.
Sell your Assets
Selling off assets is one of the most utilized options to save oneself from bankruptcy. You can try to pay your debt by selling whatever assets you can quickly dispose of, as debt payments must be made in time. If you take too long to make your payments, it might already be too late.
All of your assets, including land, furniture, jewelry, electronics, etc., could possibly help you in paying debt. Some people are very attached to their things. However, they must realize that these things are temporary and, if you live to fight another day, they will eventually come back. Right now, the priority is avoiding bankruptcy at all costs because that may leave you with nowhere to go.
Settle your Debt
One way to avoid bankruptcy is settling your debt with an IRS payment plan. You may have to live hand to mouth for a certain period of time and cut out the majority of your superfluous expenses, and even some essential ones. You can live without a cell phone, satellite TV, and expensive meals for a while if it helps to avoid the ignominy of going bankrupt.
You will have to sit down with the IRS and devise a payment plan or hire an expert for the same purpose. You may have to endure the pain of working an extra job or two to make ends meet and pay your debt. However, this may be the only way forward for you.
Request your Creditors
You need to let your creditors know that you are in a distressful situation financially and hope that they are willing to help you in any way possible. You need to tell them about your plan for paying off the debt. If they are convinced, they might reduce your interest rate or monthly payments significantly.
You could be enrolled in a hardship program designed by banks and credit card companies to deal with similar situations. Before enrolling in a hardship program, ensure that the interest rates will actually go down or you could end up with an even higher minimum payment.
Seek Professional Help and Consumer Credit Counseling
Some people are not so good at convincing others. Seeking professional help is the only way forward for some as there are experts in the field that can guide you in the right direction. Even the new bankruptcy laws require you to seek credit counseling before filing for bankruptcy. The professional will meet with you and work on a possible payment plan within your budget. Avoiding bankruptcy means taking extreme measures as there are always holes in your budget that can be found and utilized.
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