Chapter 7 Bankruptcy Alternatives

Bankruptcy is scary and in many ways it is. It can ruin your credit rating and you can lose property in the process. For people looking at bankruptcy from a distance it is a prospect that is both threatening and intimidating. But for people who are neck-deep in debt, bankruptcy is actually a blessing, not a curse. Chapter 7 Bankruptcy can discharge you from your debts. This can give you relief from abusive creditors who would do everything and anything to force you to pay. Bankruptcy is not an end but a new beginning. But what if you just do not want to consider Chapter 7 bankruptcy? There are actually numerous Chapter 7 Bankruptcy Alternatives to steer clear from filing a bankruptcy.

Reduce your expenses, raise some cash

Believe it or not you can do a lot in making sure that you do not have to file for bankruptcy. The first step is to live a simpler, more affordable life. You can sell your other car, sell your house and opt renting a smaller apartment, and ditch the cable TV. All these can help you cut your expenses thereby freeing more funds to repay debts. You can also try cashing in on your 401k, sell family heirlooms and valuable items in the house, refinance your house, apply for a non-secured loan, or ask a relative for a loan. These measures can help you raise more money to pay up urgent debts that is causing you a lot of stress.

Negotiate with your creditors

You can actually call up your creditors and negotiate for a repayment scheme that can assure them of getting their money back. This gives you more time to find ways to repay all the money you owe. This can also give you peace of mind. You do not have to be afraid picking up the phone thinking a credit collector is on the other line. This route can be difficult but it beats thinking about unpaid debts all night.

Consider Chapter 13 bankruptcy

Chapter 13 bankruptcy helps you develop a sound repayment scheme that can help you rise above your debts overtime. It might take longer than Chapter 7 bankruptcy but it provides a better credit standing in the end with just a 7-year life span on your records upon filing. Why is Chapter 13 better than debt management programs by a debt counseling agency? With Chapter 13 you are protected from legal action from creditors if you miss payment, and that protection is really handy in your most trying financial crisis.