In today’s tough economic times, many men and women are suffering from piles and hemorrhoids of unpaid debt where they feel as though there is no way to get out from underneath it all. They look into filing for bankruptcy for the reason that only viable option to save them coming from creditors hounding them for the money. But bankruptcy can be a long, drawn out process where individuals sell assets in addition to create new repayment plans. While it looks like the only selection, it is not necessarily, as there can be bankruptcy alternatives, and it ought to be avoided at many costs.

There are many reasons individuals will need to avoid bankruptcy and instead look into a few of the many available bankruptcy alternatives available. Bankruptcy has a very negative effect on one’s credit. It may bring down a person’s credit rating by up so that you can 250 points plus the bankruptcy filing stays on a credit report designed for seven to few years, making it extremely difficult for individuals to get new loans with decent interest rates. Bankruptcy can adversely affect a person’s financial situation as it’s going to much harder to rent your dream house or buy your car because those individuals will be seen as untrustworthy. As well, individuals may not even be able to qualify for any new credit until such time as around two to four years after bankruptcy has been filed.

Furthermore, while many believe bankruptcy gets rid of all debts, it is not true. There can be a difference between unsecured debts, such as credit card debts, and secured debt, like student loans and child help. While bankruptcy will aid in eliminating unsecured debts, it will not help individuals wipe out their secured debt. Men and women will still be required to seek alternative routes to deal with any secured debt they will may have as a result of various bankruptcy alternatives. Bankruptcy also will never fully protect retirement plans. In some states, IRAs, 401Ks,social security benefits, government pensions, and other retirement monies may be easily tapped into for you to repay all debts. As well, individuals can lose property as certain assets will be sold off to repay debts. Individuals can actually lose their car or worse yet, their home.

While bankruptcy will save someone in the short term, it can negatively influence a person’s life for the long term, which is why it should be avoided unless there is no other possibility. Before looking into filing for bankruptcy, individuals should exhaust all other bankruptcy alternatives. These bankruptcy alternatives include debt settlement, debt consolidation, debt management, debt repayment negotiations, and financial management plans to settle debt. These options will aid people while we are avoiding bankruptcy. While some may still have a negative mark on their credit file, it will not last so long as and get easily fixed with any one example of these or a combination of these alternatives to bankruptcy.

Click here to know about procedure of Bankruptcy Alternatives.


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