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Home > Personal Finance > Are There Any Other Options Besides Filing Bankruptcy?

Are There Any Other Options Besides Filing Bankruptcy?

George Sterling | Monday, October 29th, 2012

Filing a bankruptcy is one of the best and most powerful options when it comes to eliminating debts, but a lot of individuals don’t know that there are also alternative options available for eliminating debt. When someone owes a lot of debt, the first step they take is to visit a bankruptcy attorney. The attorney almost always suggests that bankruptcy is the only option available to them. This is most likely due to the reason that even an attorney has to make money and which is why they can end up sending people to paths that are unnecessary.

Contacting a bankruptcy attorney will most likely get you into unwanted trouble like paying extra fee. So depending on your particular problem, it is highly suggested that if you owe a few thousand dollars, it is best that you first try and negotiate with debt creditors on your own. This will help you reduce the interest rates when paying back the debt and will also get rid of the fee that comes with filing a bankruptcy.  But keep in mind this is only valid if your debt isn’t too large.

The second option you can take is to use a debt settlement company to help you negotiate with creditors to reduce interest on the amount owed. But before you sign up with a debt settlement company, always have some sort of hands on research over the company. Many debt settlement companies in the market can be dodgy to deal with and if you are not careful, you could end up in a scam. This is why you should always work with a company that you trust the most.

The third option is to simply wait and do nothing until the creditors approach you themselves. This move can be quite risky but sometimes depending on individual requirements, it can also turn into your favor. Before the issue is taken into a court, some creditors will try to settle the amount by visiting you outside the court and if you are lucky, you may end paying a lot less than currently owed with suitable interest rates. You should however only take this step if you know that you have some funds available to pay the creditors.

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