Alternatives to Bankruptcy
Learn what you can do instead of filing for Chapter 7 or Chapter 13 bankruptcy.
In many situations, filing for bankruptcy is the best remedy for debt problems. In others, however, another course of action makes more sense. This article outlines your main alternatives.
Stop Harassment from Creditors
If your main concern is that creditors are harassing you, bankruptcy is not necessarily the best way to stop the abuse. You can get creditors off your back by taking advantage of federal and state debt collection laws that protect you from abusive and harassing debt collector conduct. For more information, see What to Do If a Bill Collector Crosses the Line.
Negotiate With Your Creditors
If you have some income, or you have assets you're willing to sell, you may be a lot better off negotiating with your creditors than filing for bankruptcy. Negotiation may buy you some time to get back on your feet, or your creditors may agree to settle your debts for less than you owe.
Design a Repayment Plan With Outside Help
Many people aren't comfortable negotiating with their creditors or with collection agencies. Perhaps you aren't confident with your negotiation skills, or the creditors and collectors are so hard-nosed that the process is too unpleasant to stomach.
If you don't want to negotiate on your own, you can seek help from a nonprofit credit or debt counseling agency. These agencies can work with you to help you repay your debts and improve your financial picture. (To find out about agencies in your area, go to the website of the United States Trustee, at www.usdoj.gov/ust, and click "Credit Counseling and Debtor Education"; this will lead you to a state-by-state list of agencies that the Trustee has approved to provide the credit counseling that debtors are now required to complete before filing for bankruptcy.)
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