Debt Management: 7 Things You Should Be Considering Before Filing For Bankruptcy

Thousands of people file for bankruptcy each year when they find that the financial rut overwhelms them. Bankruptcy sometimes leaves a consumer with a poor credit score and file for up to seven years. If you are currently considering bankruptcy, you can consider these seven alternatives before you move forward.

Debt Settlement

One thing that you may want to consider before you file for bankruptcy is a debt settlement. You may be able to get an experienced counselor to negotiate a "pay in full" balance on some of your accounts that could render them as paid. 

If you can get that “pay in full” balance, then you essentially have a clean slate and you will be able to move on. With that said, you don’t want to go back into debt and you will want to be more careful about how you invest and spend your money in the future.

Debt Consolidation

Debt consolidation is a very common practice. You may just need to consolidate your bills so that they will be clearer to you. You can do a consolidation with a credit card, consolidation loan or a debt management plan. 

All three alternatives will allow you to make one low monthly payments. This should also help lower the interest rate on these payments making the burden of your debt a little easier to bear.

Debt Negotiation

Debt negotiation is the act of trying to persuade the creditors to give you a break on your debt. You can do that through an experienced attorney or counselor. You may be surprised at the leniency you receive if you make an effort to negotiate. 

However, you do not want to enter these negotiations without that attorney or counselor on your side. This will give you a better chance of getting some breaks on your debt payments.

Budget Consulting

Budget consulting is an educational course that a seasoned financial specialist like the ones at the Law Office of Barbara B. Braziel provide. Such lessons can teach different aspects of your financial profile and how you can avoid some of the most common pitfalls. 

If you go through such a program, you can learn how to cut your expenses so that you can have more funds for your savings and debt.

Debt Management Program

A debt management program can get you back on track without making you file for bankruptcy status. 

A counselor can help you to develop a monthly repayment plan that fits into your budget, and the counselor can even pay the bills for you each month for a small fee. Some consumers find such programs to be quite helpful.

Credit Monitoring

One of the best ways to keep track of your credit and how it has been impacted by debt is to monitor it. Monitoring your credit can keep you out of the bankruptcy court. 

You can dispute things that are making your credit report look poor and keep an eye on new developments. Monitoring software costs approximately $10 a month.

Credit Counseling

Sometimes it is just too difficult to manage your debt and budget all on your own. Sometimes you really do need the assistance of a professional. 

It may cost many to have a counselor or financial advisor on your side, but if it ultimately helps get you out of debt in the long run, then this is worth looking into.

Now you know of some alternatives to bankruptcy. Consider them and whether they can serve you well. If not, you can always speak to a bankruptcy expert.