Saying Goodbye to Debt: Do You Know These 4 Alternatives to Bankruptcy?

If you’ve got major debt problems – you might think your only option is to file for bankruptcy. It can be a hard step to take, but for some, it’s the only option. However, that isn’t always the case. Did you know that there are a number of different options for you even if you think that filing for bankruptcy is inevitable? In this article, we’re going to look at them. Make sure you’ve exhausted every possible option before you decide that bankruptcy is for you.

Saying Goodbye to Debt: Do You Know These 4 Alternatives to Bankruptcy? - empty wallet image

1. Get a debt consolidation loan

While it might not be the best idea to take out more debt in order to pay off other loans – this could be a viable option if you really believe that your money-issues are only short-term. A debt consolidation loan could help you by giving you one large loan to pay off all your smaller debts. This can work well if you can arrange a new loan with better interest rates and lower monthly repayment amounts which will help you clear other debts that are causing you more trouble to pay off. When you can shop around for different loans with more favourable payment plans and interest rates, this could be a good option.

This option will only really work for some people, and especially those who are only having short-term money issues.

2. Come to an agreement with your lenders

You might be able to come to an agreement regarding specific payment plans, extension periods, or a reduction in your total debt by discussing it with your lenders. Many of them will want to get some back rather than nothing if you file for bankruptcy. So give them a call and discuss your options, and make it clear that you are considering bankruptcy seriously. You can try sites like this for more information: www.debtconsolidationnearme.com/florida/index.php.

3. Get an administration order

An administration order ties up all your debts into one package to make the situation slightly easier to manage. Then you can make one single monthly payment to a court. These are normally for smaller debt amounts and are good for people who can afford to pay something back. After an initial period, the rest of the debt will be written off.

4. Get a debt relief order

The final of our alternatives to bankruptcy we will consider is the debt relief order. If you’ve got debt and don’t own a home, then you could be entitled to a debt relief order. These are normally granted to people who don’t have many assets and cannot repay their debts. When you get a debt relief order, lenders will not be able to take action to recover money owed for at least a year, unless they get specific court permission. This leaves you with a bit more room for movement without having to worry about having debt collectors taking any of your things away.

When you have one of these relief orders in place, you’ll still have to pay normal bills like your utilities. After this initial period, your debts will be written off. To qualify for one of these orders, you must not be able to pay any debts, but the debt needs to be a smaller amount. You also must not have many assets.