avoiding bankruptcy: What You Need to Know

First Name:
 Last Name:
Email Address:
 Zip Code:
Primary Phone:
- - 		Alternate Phone:
- -
Preferred Contact Time:
Yes! I would like to receive other
helpful financial tips and offers.
Do you have at least $10,000 in credit card debt? Yes No
Unsecured Debt Amount:
Debt Amount:

Examples of Unsecured debt include:

  • Credit Cards
  • Department Store Credit Cards
  • Oil/Gas Credit Cards
  • Legal Bills
  • Personal loans (without collateral)
  • Cell Phone Bills
  • Credit Lines
**The following ARE NOT eligible**
  • Student Loans
  • Mortgage Payments
  • Car Payments
  • Secured Loans
  • Income Tax Payments
we protect your privacy, see our privacy policy

Tips for Avoiding Bankruptcy

Bankruptcy is one of the most stressful events that a person can go through; it turns your life upside down both during the process and long after. Your credit is severely damaged and depending on the type of bankruptcy which you file, it remains a stain on your credit report for up to ten years. Even after ten years, you can be asked if you have ever filed for bankruptcy when applying for a loan or for life insurance in excess of $150,000. If you lie or think the statute of limitations has lapsed and don’t mention your bankruptcy, you have committed criminal fraud. Because it can affect every aspect of your life, it is best to avoid bankruptcy if at all possible.

Avoiding bankruptcy may seem easier said than done, but there are steps you can take that will allow you to regain control of your finances. The most important is to start early and not wait until you have lost all ability to pay your bills.

  • One of the best things you can do is overhaul your spending habits. If there are areas in which you can cut down, do it. When paying off debt, even the extra $30 you saved by not going out to eat can help you make payments. Can you get a less expensive apartment? Can you trade in your car for a less expensively maintained one? Big and little steps are helpful.
  • Figure out ways to make more money. It is not always possible to get a better-paying job, but you can earn money by selling unnecessary items. Can you get a second job? Can you borrow money from family members?
  • Talk with your creditors. You cannot ignore them – they just don’t go away. Tell them you want to pay your debt but have financial hardship. Many credit card and banks will lower your monthly payment and/or your interest rate.
  • Debt settlement may be a great solution for you when you are trying to avoid bankruptcy. Make sure you research potential services and choose one that is affiliated with the Better Business Bureau or the Chamber of Commerce. This is a good option if you have already tried to talk to your creditors yourself and haven’t made any progress.

Some financial planners say that you should never pay off debt with more debt. To avoid bankruptcy and its long-lasting effects, however, a consolidation loan may be a good option if you can find a loan with low interest rates. Chance are, though, that the interest rate will be high (because your credit is likely to be less than perfect at this point). It may still be a good way to avoid bankruptcy, but make sure you can afford to make the payments. Another option is to use a home equity loan to refinance your debt. The interest rate is likely to be reasonable. Again, make sure you can afford the loan. Debt settlement may be the best option, however, because you are not adding to your debt, just working to pay it off.

By considering these alternatives and starting early, you may be able to avoid bankruptcy and get your finances back on track. Once you are back in control, don’t go back to your old spending habits. You’ll be back where you started, trying to avoid bankruptcy yet again.