Bankruptcy can be embarrassing, and it creates difficulty in obtaining additional credit in the future. So most people do their best to avoid it. Sometimes bankruptcy is unavoidable, but there are alternatives you can try first. Not all options are suitable for everyone. Two common options are:
You can negotiate with your creditors on your own or enlist the help of a lawyer or debt settlement company. Payments can be either a lump sum or a payment plan.
A debt consolidation loan can save you money and reduce your stress. It offers several advantages over trying to pay off individual debts, including:
As long as you have a steady income, a restructured settlement plan may be able to:
Having only a few creditors can increase your chances of success with negotiations, as this makes it more likely they will all agree to your plan.
Potential pitfalls with a consolidation loan include:
Debt restructuring plans can greatly reduce the amount you owe, but they have a high failure rate and you still face a high probability of filing bankruptcy. It can be difficult and time consuming to negotiate with your creditors on your own. Debt settlement companies can help, but using one comes with its own risks. Risks involved in debt restructuring:
Because it is difficult to evaluate companies and plans on your own, it may be in your best interest to discuss your situation with a lawyer familiar with bankruptcy law, who can evaluate your particular circumstances and advise you of your options, including finding a trustworthy settlement program.