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Recourses Other Than Bankruptcy

Apr 3, 2008
None of us ever plan to go bankrupt but you hear about it happening to large corporations all the time. Finding an alternative to bankruptcy could save you a lot of hassle.

A debt consolidation loan may be the answer. Debt consolidation is when all your debt is combined with one loan for the total amount. Creditors are paid money owing to them and the bank who issues the loan receives a reasonable monthly payment from the consumer.

Debt consolidation mostly includes unsecured debt. This would be credit cards, store credit cards, unsecured lines of credit from companies, and gas cards. Unsecured debt is what creditors have a hard time recouping from people because it is not backed up by any collateral.

If you can't find a bank that will give you a debt consolidation loan, go through an agency. The agency counselors are used to working with creditors and will negotiate on your behalf. They can get your debt dropped by as much as sixty percent. You then make just one monthly payment to the agency, and they take care of the rest with the creditors.

You do not have to liquidate your assets to consolidate you debts. In the case of bankruptcy, the court may order you to sell your belongings to raise money to pay your creditors. With debt consolidation you can keep your belongings and have another option.

Something else that you can do yourself is to get another income. It's not the easiest thing to do but if it allows you to increase your credit card payment monthly for a year or two until it's eliminated, it could be worth it. If you can't manage a second job then maybe you can get some overtime at your current one. The key to reducing your debt is finding a way to bring in more money.

A second income can also give you extra money while paying off a debt consolidation loan. Life has a way of throwing things at us when we least expect it and a little extra cash can help with that. You can save for a rainy day and still pay off some of your debt.

Starting a home business is another option. Some home businesses can be started with little or no money if you don't have time for a second job. Even selling items on eBay can bring in some extra cash when needed.

If you have a special skill you may be able to loan yourself out to others who could use your services. Use the extra money wisely to pay down your debt.

Bankruptcy is not the way to go if you don't absolutely have to. Seek alternatives to this course of action. The changes don't have to be permanent, just until you get out of debt and back on a strong financial footing.
About the Author
For more practical advice for reducing credit card debt, surf on over to the Debtopedia website at http://www.debtopedia.com. We offer lots more helpful advice to get rid of credit cards and other debts, while saving interest in the process.
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