The Main Bankruptcy Alternatives

The main bankruptcy alternatives are out-of-court settlement with creditors, debt counseling services, and debt consolidation loans.


Out-of-Court Settlement Information

Rather than file bankruptcy, one may attempt to consider settling your unsecured debt at a reduced amount. It is unlikely that an individual could do this independently but there are companies that will serve you negotiate with your creditors. Is is important that these negotiations are handled properly and the consumer should seek professional help. With all these actions there could be a negative effect on one's credit score.


Debt Counseling Service Information

Debt counseling services can be a good start in helping you deal with your financial difficulty. They can consolidate your monthly payments and obtain payment or interest reductions on your unsecured debts. The only problem with debt counseling is that numerous people are in such financial trouble that they will not qualify for debt counseling because they will not be able to repay their debt even under the better terms.


Debt Consolidation Loan Facts

An additional option is borrowing against the equity in one's home to pay down credit card debt. This of course takes home equity and a careful consideration to make sure you are not putting yourself in a worse position. Not being able to pay your home equity loan could leave you in a worse position than not being able to pay your credit card debts.